Simple Break of Structure BoS Trading Strategy Explained

7 mag

One of the best and reliable strategies to trade break of structure BoS is to apply multiple time frame analysis.
In this article, I will teach you my break of structure gold forex trading strategy. You will get a complete step-by-step guide with examples.

Let's start with a quick theory and let me explain to you what is break of structure BoS in Smart Money Concept SMC trading.



In a bullish trend, break of structure BoS is an important event that signifies a continuation of an uptrend. It is based on a violation and a candle close above the level of the last higher high (HH).

After a breakout, the broken level becomes the first strong support for trend-following buying.



Check multiple examples of confirmed breaks of structure BoS on GBPNZD forex pair on a weekly time frame.



In a downtrend, Break of Structure BoS means a bearish trend continuation. Break of Structure is considered to be confirmed when a candle closes below the level of the last lower low (LL).

The broken key level becomes the closest strong support for buying.



That's the example of a healthy downtrend on USDJPY forex pair on a daily. Each break of structure BoS pushed the prices lower, providing a strong signal to sell.

What newbie traders do incorrectly, they trade break of structure without a confirmation strategy, and it leads to substantial losses.



Though GBPCHF is trading in a bullish trend and though each BoS provided a trend-following signal. The price retraced significantly lower below the broken structure before the growth resumed.

When the price retests a broken structure after BoS in a bullish trend, start lower time frame analysis.

If you identified a break of structure on a daily, analyze 4h/1h time frames.
If on a 4H, then 30/15 minutes.



After the price sets a new higher high with BoS in uptrend, it usually starts trading in a minor bearish trend on lower time frames.

With our strategy, your signal to buy will be a retest of a broken structure and a consequent bullish Change of Character CHoCH. That will provide an accurate bullish signal.



In a bearish trend, analyze the lower time frames after a retest of a broken structure. Your signal to sell will be a bearish Change of Character CHoCH.



Look at a price action on EURCHF on a daily.
We see a strong bullish trend and a confirmed Break of Structure BoS.

According to the rules of our trading strategy, we start analyzing 4h/1h time frames after a retest of a broken level of the last Higher High.

Our signal to buy is an intraday bullish CHoCH. We open a long trade after that with the stop loss below the intraday lows and take profit being a current high.

That's how simple this strategy is.

Multiple time frame analysis provides the extra level of security.
Strong lower time frame confirmation substantially increases the win ratio of a trading setup.

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