Break of Structure in Smart Money Concepts | SMC BOS Trading Strategy Step-by-Step

Описание: Smart Money Concepts (SMC)

Smart Money Concepts is a trading approach that focuses on understanding how institutional traders — the “smart money” — move the market. Unlike retail trading, SMC looks beyond traditional indicators and aims to track liquidity, market structure, and order flow.
Key principles in SMC include:

Market Structure (higher highs, higher lows in uptrends; lower lows, lower highs in downtrends)

Liquidity Zones (areas where stop losses are likely placed)

Order Blocks (zones where institutions entered the market)

Break of Structure (BOS) and Change of Character (CHoCH) to signal shifts in trend


The core idea: Follow the footprints of big players rather than chasing retail signals.

Break of Structure (BOS)

A Break of Structure occurs when the price moves beyond a previous swing high or swing low, showing that the current market trend is likely continuing.

Bullish BOS:
Price breaks above the last swing high in an uptrend → confirms bullish continuation.

Bearish BOS:
Price breaks below the last swing low in a downtrend → confirms bearish continuation.


Difference from CHoCH:

BOS = continuation signal.

CHoCH = reversal signal.


How to Trade BOS (Step-by-Step)

1. Identify Market Structure

Mark recent swing highs & lows.

Determine if the market is trending up, down, or ranging.


2. Spot the BOS

Wait for a clear candle close above/below the previous high/low.

Avoid false breakouts — use multiple timeframes for confirmation.


3. Wait for Retracement

After BOS, price often pulls back to an order block or FVG (Fair Value Gap).

This is where smart money often re-enters.


4. Enter the Trade

Bullish BOS: Enter on pullback to demand zone/order block.

Bearish BOS: Enter on pullback to supply zone/order block.


5. Manage Risk

Place stop loss below the demand zone (bullish) or above supply zone (bearish).

Risk-to-reward ratio: Aim for at least 1:2 or 1:3.


6. Take Profit

Target the next liquidity pool (previous highs/lows).

Trail stop loss if you expect extended trend continuation.


Example:

Market in uptrend.

Price breaks last swing high → bullish BOS.

Retracement to 4H demand zone.

Enter long position → Stop loss under zone → Take profit at next swing high.