Market Structure/
BOS & CHoCH (Trend & Reversal)
TL;DR
Market Structure is the foundational layer of chart reading. Break of Structure (BOS) signals trend continuation, while Change of Character (CHoCH) provides the earliest structural warning of a potential trend reversal.
How It Works
- 1
An uptrend consists of Higher Highs (HH) and Higher Lows (HL). A downtrend consists of Lower Highs (LH) and Lower Lows (LL).
- 2
BOS (Break of Structure): When price closes decisively beyond the previous swing point in the direction of the trend.
- 3
CHoCH (Change of Character): When price breaks the structural point that led to the highest high (in an uptrend) or lowest low (in a downtrend), signaling a shift in momentum.
- 4
A CHoCH is often the first sign that Smart Money has shifted their directional bias.
LiquidMind's foundational filter relies on `get_market_structure()`. It refuses to take long trades if the Higher Timeframe (e.g., 4H) structure has just printed a bearish CHoCH, regardless of how attractive a local Point of Interest might look. Conversely, entering exactly after a synchronized CHoCH on a lower timeframe following a HTF sweep yields the highest system confidence.