Introduction
Understanding market structure is fundamental to becoming a consistently profitable trader. Two key concepts that Smart Money traders rely on are the Break of Structure (BOS) and the Market Structure Shift (MSS). While they may seem similar at first glance, they serve different purposes and signal different market intentions.
In this guide, we will break down:
- The difference between BOS and MSS
- When and why they occur
- How to identify them on your charts
- How to trade based on these structures
- Real chart examples for visual clarity
---
Break of Structure (BOS)
A Break of Structure is a continuation signal. It confirms that the current trend remains intact. BOS typically occurs when price breaks a recent swing high or low in the direction of the existing trend.
Key Characteristics:
- Happens with the trend
- Confirms continuation
- Can be used to trail stops or add to positions
Example:
In an uptrend:
- Higher High (HH) and Higher Low (HL) form
- Price breaks above the last HH → BOS to the upside
---
Market Structure Shift (MSS)
Market Structure Shift signals a potential reversal. It occurs when price breaks a significant swing level against the prevailing trend and is often followed by a shift in the internal structure (e.g., lower highs after higher highs).
Key Characteristics:
- Happens against the trend]
- Signals possible trend reversal
- Often occurs after a liquidity grab or stop hunt
- Optional: is created by a displacement candle
Example:
In an uptrend:
- Price takes out a significant high (liquidity grab)
- Then aggressively breaks the most recent HL → MSS to the downside
---
How to Identify BOS and MSS
For BOS:
1. Determine the current trend.
2. Identify swing highs/lows.
3. Look for price breaking past these levels in the same direction as the trend.
For MSS:
1. Look for signs of exhaustion or liquidity grabs near swing highs/lows.
2. Watch for price to break against the trend structure.
3. Confirm with a shift in internal structure (e.g., lower highs start forming in an uptrend).
---
Using BOS and MSS in Your Trading Strategy
With BOS:
- Use it to confirm trend continuation
- Add to your position after a retracement into an OB or FVG
- Trail your stop-loss below the most recent HL or above LH
With MSS:
- Look for confluence (liquidity sweep + MSS = strong signal)
- Use it to spot early reversal entries
- Wait for a confirmation candle or structure shift on LTF (1m, 5m, 15m)
- If the displacement candle is too big you can wait for the retest
---
Common Mistakes to Avoid
- Confusing BOS with MSS
- Ignoring higher timeframe context
- Trading MSS too early without confirmation
- Chasing BOS without waiting for a proper retracement
Pro Tip: Use BOS/MSS with confluences like SMT Divergence, IFVGs, or key session times for higher probability setups.
---
Final Thoughts
Mastering BOS and MSS will give you an edge in understanding price delivery and anticipating market moves. BOS confirms strength in the current trend, while MSS warns of a possible reversal and new trend forming. Combine these with smart money tools, and you’ll be equipped to enter the market like a pro.
Happy Trading!
Understanding market structure is fundamental to becoming a consistently profitable trader. Two key concepts that Smart Money traders rely on are the Break of Structure (BOS) and the Market Structure Shift (MSS). While they may seem similar at first glance, they serve different purposes and signal different market intentions.
In this guide, we will break down:
- The difference between BOS and MSS
- When and why they occur
- How to identify them on your charts
- How to trade based on these structures
- Real chart examples for visual clarity
---
Break of Structure (BOS)
A Break of Structure is a continuation signal. It confirms that the current trend remains intact. BOS typically occurs when price breaks a recent swing high or low in the direction of the existing trend.
Key Characteristics:
- Happens with the trend
- Confirms continuation
- Can be used to trail stops or add to positions
Example:
In an uptrend:
- Higher High (HH) and Higher Low (HL) form
- Price breaks above the last HH → BOS to the upside
---
Market Structure Shift (MSS)
Market Structure Shift signals a potential reversal. It occurs when price breaks a significant swing level against the prevailing trend and is often followed by a shift in the internal structure (e.g., lower highs after higher highs).
Key Characteristics:
- Happens against the trend]
- Signals possible trend reversal
- Often occurs after a liquidity grab or stop hunt
- Optional: is created by a displacement candle
Example:
In an uptrend:
- Price takes out a significant high (liquidity grab)
- Then aggressively breaks the most recent HL → MSS to the downside
---
How to Identify BOS and MSS
For BOS:
1. Determine the current trend.
2. Identify swing highs/lows.
3. Look for price breaking past these levels in the same direction as the trend.
For MSS:
1. Look for signs of exhaustion or liquidity grabs near swing highs/lows.
2. Watch for price to break against the trend structure.
3. Confirm with a shift in internal structure (e.g., lower highs start forming in an uptrend).
---
Using BOS and MSS in Your Trading Strategy
With BOS:
- Use it to confirm trend continuation
- Add to your position after a retracement into an OB or FVG
- Trail your stop-loss below the most recent HL or above LH
With MSS:
- Look for confluence (liquidity sweep + MSS = strong signal)
- Use it to spot early reversal entries
- Wait for a confirmation candle or structure shift on LTF (1m, 5m, 15m)
- If the displacement candle is too big you can wait for the retest
---
Common Mistakes to Avoid
- Confusing BOS with MSS
- Ignoring higher timeframe context
- Trading MSS too early without confirmation
- Chasing BOS without waiting for a proper retracement
Pro Tip: Use BOS/MSS with confluences like SMT Divergence, IFVGs, or key session times for higher probability setups.
---
Final Thoughts
Mastering BOS and MSS will give you an edge in understanding price delivery and anticipating market moves. BOS confirms strength in the current trend, while MSS warns of a possible reversal and new trend forming. Combine these with smart money tools, and you’ll be equipped to enter the market like a pro.
Happy Trading!
MY LINKS
📈 Free Signals
bit.ly/3YxiRXr
💬 Discord Community
bit.ly/4jHHA3O
💵 Favorite Exchange
bit.ly/4lBeTXt
📈 Free Signals
bit.ly/3YxiRXr
💬 Discord Community
bit.ly/4jHHA3O
💵 Favorite Exchange
bit.ly/4lBeTXt
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
MY LINKS
📈 Free Signals
bit.ly/3YxiRXr
💬 Discord Community
bit.ly/4jHHA3O
💵 Favorite Exchange
bit.ly/4lBeTXt
📈 Free Signals
bit.ly/3YxiRXr
💬 Discord Community
bit.ly/4jHHA3O
💵 Favorite Exchange
bit.ly/4lBeTXt
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.