BOS and CHoCH Explained + Backtest on 46 Markets and a Strategy Tested on 2,209 Trades

BOS (Break of Structure) and CHoCH (Change of Character) are two core Smart Money concepts. Trend reading and most SMC setups are built on them: “wait for a CHoCH, enter at the order block”, “trade the BOS with the trend”. Every article about Order Blocks, FVG or liquidity sweeps relies on them.

In this article we explain what market structure is, how BOS differs from CHoCH and how to mark them correctly. Then we test the key question: can you make money on the break of structure itself? We ran the same rules on 46 markets — Forex, gold, silver, indices, oil and crypto — from 1999 to November 2026, more than 50,000 trades across all variants.

What is market structure

Price does not move in a straight line — it moves in waves. Wave tops are called swing highs, wave bottoms swing lows. The sequence of these points is the market structure:

• Uptrend — every high is above the previous one (HH, higher high) and every low is above the previous one (HL, higher low).
• Downtrend — lower highs (LH) and lower lows (LL).
• Range — highs and lows stay at the same levels, the structure does not update.

BOS and CHoCH are the two things that can happen to the structure: it either continues or breaks.

What is BOS (Break of Structure)

BOS is a break of structure in the direction of the trend. In an uptrend price closes above the last swing high and prints a new HH. In a downtrend it closes below the last swing low and prints a new LL.

A BOS says “the trend continues”. In SMC every new BOS is seen as confirmation that the big player is still pushing price the same way. The low the break grew from becomes the protected low: as long as price holds above it, the trend is considered alive.

What is CHoCH (Change of Character)

CHoCH (pronounced “choch”) is a break of structure against the trend — a change in the market’s character. In an uptrend price closes below the last HL, i.e. it breaks the protected low. In a downtrend it closes above the last LH.

A CHoCH is the first sign of a reversal. It is not a new trend yet — it is a signal that the old one has broken. It is sometimes called an MSS (Market Structure Shift); in practice it is the same thing.

How to mark BOS and CHoCH correctly

Half of all SMC arguments come from everyone marking structure their own way. To keep the test fair we used rules that work the same on any chart:

• A swing is a fractal of 3 candles on each side. A swing high is a candle whose High is above the three candles to its left and the three to its right. A swing low is the opposite. Important: a swing is only known 3 candles after it forms — before that it does not exist on the chart.
• A break counts only on a candle close. If price pokes through a level with a wick and closes back, that is not a BOS or a CHoCH — it is a liquidity sweep.
• The type of break depends on the previous one. If structure was last broken upward and price now closes above a swing high — it is a BOS. If it was broken downward and now breaks upward — it is a CHoCH.

Internal and external structure. Small fractals (1–2 candles) give many small “internal” BOS and CHoCH. Large ones (5–10 candles) give rare breaks of the “external” structure. We tested sizes from 2 to 5 candles: 2–3 candle fractals did best, with 4–5 candles the result is about half as good.

Can you trade a BOS or CHoCH on its own? The test

The most common advice in SMC videos: “wait for a BOS and enter with the trend” or “a CHoCH means reversal, enter”. We tested this on 46 markets with identical rules: stop beyond the protected extreme plus a 5-pip buffer (0.05% of price for non-Forex), target 3R, time exit after 60 candles, spread included in every trade. Here is what H4 showed:

What the table shows:

• The break of structure itself predicts nothing. Almost 10,000 BOS trades and as many CHoCH trades give a profit factor of 1.00–1.01 — coin-flip level. Before real-account slippage and commissions the result is near zero; after them it turns negative.
• A trend filter does not save BOS. “Trade BOS only with the trend” — −79R.
• Entering at the order block after a CHoCH is the worst variant: −278R. The order block sits far from the break and price often runs straight through it.
• Context changes everything. If price first sweeps liquidity — wicks below an old low and closes back — the same signal becomes 10 times better per trade: +0.10R instead of +0.01R.

We also checked other timeframes. On H1 plain BOS and CHoCH lose −1,700R to −3,300R: lots of signals, and the spread eats everything. On D1 they are around zero. Another popular approach — holding the trade and trailing the stop under every new protected low — made a big profit only on crypto thanks to the 2021 bull market; on Forex it loses.

The conclusion is simple: BOS and CHoCH are a way to describe the market, not a signal. They describe what price is doing very well, but on their own they give no edge. Below is the chain that does.

The strategy: liquidity sweep → CHoCH → retest

The logic: buy stops of long traders sit below an old low. A big player pushes price below it, collects those stops (liquidity) and buys into them. Price closes back above the low and then breaks structure upward — that is the CHoCH. A retest of the broken level gives an entry with a short stop beyond the sweep low.

Buy rules

1. Timeframe H4. Swings are fractals of 3 candles on each side.
2. Liquidity sweep. A candle wicks below a swing low that formed no more than 60 candles ago and has not been broken yet, and closes back above it.
3. CHoCH. After the sweep a candle closes above the last swing high, without making a new low below the sweep.
4. Entry. Buy Limit at the broken swing high — we wait for the retest. The order stays for 20 candles.
5. Stop loss — 5 pips below the sweep low (gold, indices, oil and crypto — 0.05% of price).
6. Take profit — 3R (three times the risk).
7. Cancel. If a candle closes below the stop or price reaches the target before touching the limit order, delete the order.
8. Time exit — after 60 H4 candles (about 10 trading days) if neither stop nor target was hit.
9. One trade at a time per market.

Sells are mirrored: a sweep of a swing high with a close below it, a bearish CHoCH (close below the last swing low), Sell Limit on the retest of the broken level, stop above the sweep high.

If you have read our Liquidity Sweep article, the model will look familiar: there we tested sweep → MSS → FVG on 12 markets. Here it is simpler — no FVG, entry right at the retest of the broken level — and tested on 46 markets.

⬇ Read the strategy first — the indicator and Excel journal links are repeated at the end of the article

Statistics: 2,209 trades on 46 markets

Markets: 28 currency pairs, gold and silver, NAS100, US500, GER40, Brent oil and 12 cryptocurrencies. History from 1999 (gold from 2004, most crosses and indices from 2022–2024, crypto from 2018) to November 2026. Spread is included in every trade.

Why is the result positive with fewer than 40% winners? The target is three times the stop: one winner covers three losers. Also, almost a third of the trades (650) closed on time, and 79% of them in profit — together +475R. After a sweep and a CHoCH price often moves the right way but does not reach 3R within 10 days. We also tested the version without a time exit (hold until stop or target): +250.1R on 1,930 trades, but a deeper drawdown (−39.1R) and trades that last for weeks. We kept the 60-candle exit — it frees up capital and smooths the curve.

The curve does not rise evenly. From 2011 to 2018 the strategy was almost flat, and most of the growth came in 2019–2026, when crypto, indices and crosses joined the test. That is the honest picture: the edge is small, and long flat periods are normal.

By year

18 of 28 years were profitable. The best years are 2024 (+57.0R), 2026 (+32.6R to November), 2021 (+22.6R) and 2019 (+22.1R). The worst is 2004 (−9.2R). 2025 lost 7.9R — that happens too, and you should keep it in mind before trading the strategy.

By market group

All four groups are in profit: Forex +51.0R, crypto +84.7R, gold and silver +37.1R, indices and oil +36.2R. The best markets are USDJPY (+39.3R), gold XAUUSD (+37.0R), ETHUSD (+31.3R), CHFJPY (+24.7R), US500 (+20.0R) and EURUSD (+19.1R). The worst is USDCAD (−28.9R).

Buys and sells

Buys made +134.6R, sells +74.3R. Both sides are profitable, so we trade both.

Trade examples step by step

On every chart: the orange dashed line is the liquidity level and the sweep candle (SWEEP), the purple dashed line is the swing that was broken and the CHoCH candle, the blue line is the limit order on the retest, the red and green zones are the stop and the target. Candle times are Alpari server time (GMT+2/3), crypto is UTC.

Example 1. Gold XAUUSD, buy, August 2026. On August 3 a candle wicked below the low at 4020.88 down to 4019.14 and closed back above — liquidity swept. On August 4 price closed above the last swing high — CHoCH. The Buy Limit at the broken level 4079.03 filled on the next candle, stop 4018.64, target 4260.20. The target was hit on August 5: +3R in six candles.

Example 2. BTCUSD, sell, May 2026. Price swept the high at 77,905 (wick to 78,080) and closed below it, one candle later it closed below the swing low — a bearish CHoCH. Sell Limit 76,108, stop 78,118, target 70,078. Target hit on June 2: +3R.

Example 3. US500, sell, September 2026. A sweep of the 7788.9 high, a bearish CHoCH on September 23. The retest of 7753.4 came only two days later — the limit order waits up to 20 candles. Stop 7795.4, target 7627.5 hit on October 1: +3R.

Example 4. GBPJPY, buy, May 2025. A sweep of the 190.388 low, a bullish CHoCH on May 1, Buy Limit 191.261, stop 189.941. For more than a week price hovered around the entry and dipped to 190.24 — two thirds of the way to the stop — then rallied to the 195.221 target: +3R on May 12.

Example 5. USDJPY, sell, January 2026. Here the sweep and the CHoCH happened on the same candle: it wicked above the 158.89 high to 159.215 and closed below the swing low. Sell Limit 158.234, stop 159.265, target 155.141 hit four candles later.

Example 6. Time exit: NAS100, sell, July 2026. A sweep of the high, a bearish CHoCH, Sell Limit 29,477.8. Price dropped but never reached the target, came back and fell again. After 60 candles the trade was closed on time at +1.35R.

Example 7. A losing trade: gold XAUUSD, buy, October 2026. All conditions were met: a sweep of the 4139.11 low, a bullish CHoCH, Buy Limit 4192.77. But the next candle went through the entry and hit the 4133.09 stop right away: −1R. Such trades are 55% of all trades — a normal part of the strategy.

Example 8. A losing trade: GBPUSD, buy, September 2026. A sweep of the 1.32039 low, CHoCH on September 30, entry 1.32797. Price went down and hit the 1.31963 stop the next day: −1R.

Gallery: every trade of 2025–2026

Below are all 595 trades of 2025–2026 in a row, no cherry-picking. Filter by result, side and year; click a trade to open its chart.

The same trades as a table: