Smart Money Concepts
Market structure: BOS and CHoCH explained
6 min read · by Jérôme Le Menn
Market structure is the first thing to master in SMC: it describes the trend through the sequence of highs and lows, and its breaks. Without it, order blocks and FVGs have no context.
Highs and lows
An uptrend strings together higher highs and higher lows. A downtrend does the opposite: lower highs and lower lows. A range alternates with no clear direction.
Correctly spotting swings (significant turning points) is the core skill — and the main source of error for beginners, who confuse noise with structure.
BOS — Break of Structure
A Break of Structure happens when price breaks the last high (in an uptrend) or the last low (in a downtrend) in the DIRECTION of the trend. It signals a continuation.
The BOS confirms that the current momentum continues: it validates entries in the direction of the move.
CHoCH — Change of Character
A Change of Character is the first break AGAINST the trend: in an uptrend, price breaks the last low. It signals a possible reversal.
The CHoCH is a warning signal: structure could flip. Many SMC strategies wait for a CHoCH to anticipate a reversal, then an order block or an FVG for the entry.
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Start for freeFrequently asked questions
What's the difference between BOS and CHoCH?
The BOS is a break in the direction of the trend (continuation). The CHoCH is the first break against the trend (potential reversal).
On which timeframe should I read structure?
Structure exists on all timeframes. Many read the trend on H4/H1 and refine the entry on M15/M5. Multi-timeframe is part of SMC.
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