For a Break of Structure (BOS) to be valid, the closing price, not the highest or lowest price, is what matters. A price that breaks above a previous high but closes below it is, strictly speaking, not a real structure change. It is just a false breakout. The structure is truly broken only when a candle body closes clearly above the prior high (bullish) or below the prior low (bearish).
Step 1: Understanding the Definition of BOS – Close Confirmation Is a Must
First, you must know what kind of "break" counts as a "valid break."
What to do: Tell the difference between a price touch and real structure damage.
How to do it:
Invalid break: The highest price (High) briefly spikes above the prior high, but the candle's closing price (Close) falls back below it, or the candle leaves only a long upper wick above the prior high. In ICT/SMC systems, this is seen as a liquidity sweep—the spike triggers stop-loss orders and breakout entries sitting above the high, not a genuine directional shift.
Valid break: The candle body's closing price is clearly above the prior high, ideally with 2–3 consecutive candles closing above it for added confirmation. This forms a BOS and signals that market structure has flipped from ranging or bearish to bullish.
Completion standard: You can tell from the closing price whether the structure has really been broken.
Step 2: Check the Close After the Break – Is It Above or Below the Prior High?
Even if the price goes above the prior high during the session, the closing price is what decides the outcome.
Case A: The high breaks the prior high, but the close is below it (bearish engulfing or long upper wick). This is called a "false breakout" or "liquidity sweep." The market is not aiming to continue higher; it is clearing out short stop-losses above the high and trapping breakout buyers. The close falling back means sellers have regained control at that level. The structure has not changed, and the original move (e.g., a downswing) will likely continue.
Case B: The high breaks the prior high, and the close stays above it—but only by a small margin (0.1%–0.5%). Be cautious here. If the candle has a tiny body and a long upper wick, the breakout's strength is doubtful. Wait for a retest and for the next candle to close above the level to confirm the breakout is real.
Case C: The high breaks the prior high, and the close is far above it (a strong, full-bodied candle). The structure has genuinely changed. BOS is confirmed, the bullish structure is in place, and you can plan to buy on pullbacks.
Step 3: Use a Higher Time Frame to Confirm the Breakout's Nature
A close above a prior high is only a necessary condition, not a guarantee. A single breakout that closes above the level but happens right at a higher‑time‑frame resistance often fails.
What to do: Make sure the breakout aligns with the higher‑time‑frame bias.
How to do it: If the daily or 4‑hour chart is in a downtrend, a BOS on the 1‑hour chart—even with a close above the prior high—is most likely a bounce, not a reversal. Such BOS signals are often secondary swings (pullbacks inside a larger downtrend) rather than a true trend change. A valid structure shift needs confirmation from the higher time frame, or at least no conflict with it.
Completion standard: The close above the prior high happens while no stronger opposing structure is blocking the way on the higher time frame.
Risk reminder: The easiest structure to get fooled by is a long bullish candle that breaks the prior high but closes back down with a long upper wick after a smooth downtrend. This often forms a "gravestone doji" lookalike that traps buyers and leads to a fast drop, sometimes to new lows. When you see such a "breakout with a long upper wick," do not chase the long immediately after the close. Wait for the next candle to confirm its closing position before deciding.
How to Verify the Trade
Open your chart and look at the candle that last "broke" the prior high. If its closing price remains below the high, ignore the breakout and treat the structure as "unchanged" or still inside the original range. If two or three consecutive candles all close above the prior high, the BOS is confirmed.
What to Do Next
Once the BOS is confirmed, you can look for entry opportunities when the price retests the prior high (now turned from resistance into support). Use lower time frames (like 1‑minute or 5‑minute) to spot bullish price action such as bullish engulfing candles, hammer candles, or a Change of Character (CHoCH). If the price later closes back below the prior high with a full candle body, the BOS has failed. The structure returns to a state of chaos or turns bearish again, and you should cut losses quickly or switch your directional bias.
