Market Structure

Market structures are core concepts of the smart money concepts methodology. The TradingLab Smart Money Concepts toolkit automatically detects and highlights real-time market structures on the market, allowing for a wide variety of entry/exit signals.

Types Of Market Structures

Market structures allow you to determine trend continuations as well as trend reversals in the market through two distinct structures:

• Change of Character (CHoCH)

• Break of Structure (BOS)

These are further described in the sub-sections below.

Change Of Character (CHoCH)

A change of character (CHoCH), sometimes also referred to as "market structure shift" is characterized by price breaking a prior swing low during an uptrend (bullish CHoCH) or a prior swing high during a downtrend (bearish CHoCH), and thus indicates a potential market reversal.

Break Of Structure (BOS)

A BOS is characterized by price breaking a prior swing high during an uptrend (bullish BOS) thus forming a new higher high, or a prior swing low during a downtrend (bearish BOS) thus forming a new lower low. These structures occur after a CHoCH.

BOS's do not indicate reversals but continuations of a trend, as such it is common to observe successive BOS in a trend.