Question 1

What is a break of structure (BOS)?

Accepted Answer

A break of structure happens when price breaks past the most recent swing high (in an uptrend) or swing low (in a downtrend), confirming trend continuation. A change of character (CHoCH) is when price breaks in the opposite direction — a higher low gets violated in an uptrend, signaling a potential reversal.

Question 2

How do I identify swing highs and lows?

Accepted Answer

A swing high is a candle (or group of candles) with lower highs on both sides. A swing low has higher lows on both sides. The key is significance — minor intraday swings are noise, while clear pivots that the market respects as support or resistance define the true structure.

Question 3

Does market structure work for OTC and penny stocks?

Accepted Answer

Yes, but with caveats. OTC stocks have lower liquidity and wider spreads, so structure breaks can be messier. False breakouts are more common. Use daily or weekly charts for cleaner structure, and always confirm with volume — a structure break on high volume is more reliable than one on thin volume.

What Is Market Structure? Trends, Breaks & Reversals Explained

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