What is BOS in Trading?

Understanding the Break of Structure (BOS)

Definition of BOS

The Break of Structure (BOS) is a technical signal indicating that a price movement has surpassed a key area of support or resistance. This allows traders to detect a trend change, whether it is a continuation or a reversal. 🧠

A BOS occurs when the price breaks a previous structural high or low, indicating a change in the behavior of buyers or sellers.

According to a report by Bloomberg Intelligence (2024), nearly 72% of professional technical traders consider structure breaks as more reliable trading signals than classic indicators such as moving averages.

Market Structure and BOS

Understanding market structures is essential to detect a valid BOS. There are three main types of structures:

🔍 The BOS becomes a powerful tool for analyzing financial markets when these structures are well understood.

Identifying BOS in Financial Markets

How to Identify a BOS

To identify BOS, traders must analyze price charts using technical indicators and analysis tools. Here are the key steps:

“To filter out false BOS signals, I recommend always combining a break with a significant increase in volume or an RSI divergence,” explains Julien Lefèvre, technical analyst at IG France.

📈 A valid BOS is often confirmed by an acceleration in price movement and increasing volume.

Concrete example:
On the EUR/USD, if the price breaks a previous high after a retracement, with an RSI exceeding 60, this may signal a bullish BOS and a potential buy signal.

Bullish and Bearish BOS in Action

“The BOS is my main tool for assessing whether a reversal is legitimate or just a false start,” shares Louis Raymond, an experienced swing trader.

Trading Strategies Based on BOS

Integration into a Trading Strategy

An effective trading strategy around the BOS relies on the combination of several elements:

A study by Forex Factory (2023) shows that strategies integrating BOS + EMA 50 record 18% more success than those without confirmation.

🎯 Pro tip: Use the BOS to anticipate major movements in forex, stocks, or indices available on platforms like Pocket Option, which offers over 100 assets to trade 24/7 via OTC.

Example of a Strategy with BOS + RSI

🛠️ Pocket Option offers all the tools to apply this type of strategy:

BOS vs CHoCH

Several algorithmic trading institutions like QuantConnect use CHoCH in their models to detect accumulation phases before BOS.

BOS Compared to Other Market Indicators

Why Combine BOS with Other Tools?

An isolated BOS can sometimes be a false signal. That’s why professionals often combine BOS with other technical indicators:

“An isolated BOS only makes sense if it is contextualized,” states Clara Benhaïm, strategist at Société Générale Markets.

📉 Example: A bearish BOS is more reliable if the RSI is oversold and the MA50 crosses the MA200 downwards.

Importance of BOS in Technical Analysis

Why Use BOS in Your Strategy?

The BOS is a strategic benchmark in advanced technical analysis. It allows traders to:

🔥 On Pocket Option, apply your BOS strategies with:

The Break of Structure is much more than just a break signal. It is a powerful strategic tool that, when used well, allows traders to anticipate market movements and act accordingly. Whether you trade on the forex, stocks, or cryptocurrencies, mastering the BOS will give you a significant advantage. 💼

Remember that the key to success lies in practice, patience, and using the right tools. And for that, platforms like Pocket Option offer a perfect environment to test your strategies with indicators, OTC assets available 24/7, and advanced features.