When price breaks a significant swing high or low, confirming the continuation of the current trend.
Break of structure (BOS) occurs when price surpasses a previous swing point in the direction of the trend. In an uptrend, a BOS happens when price breaks above the last swing high. In a downtrend, it happens when price breaks below the last swing low. BOS confirms that the trend remains intact.
BOS is a key confirmation signal used in smart money and price action trading. It tells you the trend is continuing and that the dominant side (buyers in an uptrend, sellers in a downtrend) is still in control. Traders use BOS to time entries after pullbacks.
In an uptrend, the last swing high was at $150. Price pulls back to $140, then rallies and breaks above $150. This BOS confirms the uptrend is still valid, and traders look for entries on the next pullback.
Break of Structure (BOS): price breaks above the previous swing high, confirming the uptrend continues.