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Break of Structure: Trend Changes

5 min read•Trading Reference Guide
Break of Structure: Uptrend to DowntrendUPTREND - Structure IntactHH1HL1HH2HL2Support✓ HH → HL → HH → HL = Structure OKBREAK OF STRUCTUREBREAK!Below HL support↓ Downtrend✗ Lower Low breaks structure = REVERSAL SIGNALBOS = When price breaks the pattern of HH/HL (or LH/LL). Signals reversal potential.

Understanding Break of Structure

Break of Structure (BOS) is when price breaks the pattern that defines a trend. This signals the trend may be reversing.

The Trend Pattern

An Uptrend is defined by: Higher Highs (HH) + Higher Lows (HL)

A Downtrend is defined by: Lower Highs (LH) + Lower Lows (LL)

What Breaks Structure?

When price makes a Lower Low in an uptrend, it breaks the "higher lows" pattern

When price makes a Higher High in a downtrend, it breaks the "lower highs" pattern

Why This Matters

✓ Shows trend momentum is weakening

✓ Smart money is switching direction

✓ Potential reversal trade setup

✓ Major support/resistance has been broken

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