Break of Structure (BOS) refers to breaking the previous high or low to confirm the current trend, while Change of Character (CHOCH) signals a potential trend reversal by breaking the initial structure.
Understanding the comparison of CHOCH vs BOS in ICT style is essential for identifying trends and entry or exit points in trading.
What is a Break of Structure (BOS)?
The break of Structure indicates the continuation of the market trend. In an uptrend, the trend continues when the price surpasses the previous high and forms a new high.
In a downtrend, the trend also continues when the price falls below the previous low and forms a new low.
Bullish Break of Structure
In an uptrend, new highs are formed above the previous highs. This movement represents a bullish BOS, where the price breaks the previous high and creates a higher high.
Bearish Break of Structure
In a downtrend, new lows are formed below the previous lows. This movement represents a bearish BOS, where the price breaks the previous low and creates a lower low.
What is Change of Character (CHOCH)?
Change of Character indicates a change in the market trend. If a lower low is formed in an uptrend, the trend turns bearish, resulting in a bearish CHOCH.
Conversely, if a higher high is formed in a downtrend, the trend turns bullish, resulting in a bullish CHOCH. In essence, CHOCH occurs when the price structure breaks in the opposite direction of the previous trend, signaling a market reversal.
Bullish CHOCH
Bullish CHOCH signifies a trend reversal from bearish to bullish. The price consistently decreases in a downtrend, but with this change, it forms a higher high instead of a lower one.
This marks the end of the downtrend and the beginning of an uptrend.
Bearish CHOCH
Bearish CHOCH signifies a trend reversal from bullish to bearish. The price consistently increases in an uptrend, but this change forms a lower high instead of a higher high.
This marks the end of the uptrend and the beginning of a downtrend.
Differences Between BOS sv CHOCH
The table below provides a clear comparison of vs CHOCH BOS:
Aspect | Break of Structure (BOS) | Change of Character (CHOCH) |
Definition | A pattern for trend continuation | A pattern for trend reversal |
Occurrence | Can occur in both uptrends and downtrends | Occurs only at the end of a trend |
Significance | Identifies the current trend and its strength | Identifies the reversal and trend change |
Where Do BOS vs CHOCH Occur on the Chart?
BOS occurs in both uptrends and downtrends when the previous trend continues. In contrast, CHOCH occurs when a trend changes from bullish to bearish or vice versa.
Which is More Reliable: BOS or CHOCH?
While both CHOCH vs BOS involve structure breaks, their directions differ. As a result, both patterns have equal reliability. However, BOS indicates the continuation of the current trend, while CHOCH reflects a price reversal, often resulting in larger moves (more pips).
Conclusion
The BOS vs CHOCH styles are important methods for analyzing market behavior and identifying trends in ICT.
BOS confirms trend continuation, while CHOCH signals trend reversal. Candlestick closure is essential in both patterns to confirm the break or reversal, adding precision to technical analysis.
