LuxAlgo
LuxAlgoOct 7
Finance

You're Trading Break of Structure (BOS) WRONG

3 min video2 key momentsWatch original
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TL;DR

You're misidentifying breaks of structure, risking failed trades; correct by ensuring price makes a higher high after a pullback.

Key Insights

1

A valid break of structure requires a pullback followed by a higher high.

2

Five minimum bars must occur in a pullback for it to be valid.

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Deep Dive

Correcting Break of Structure Missteps

Many traders incorrectly mark a break of structure, risking account losses. A valid break occurs only when price pulls back and creates a higher high. The video uses Vela charts and an indicator to identify valid setups, requiring a pullback of at least five bars before confirming a trend continuation.

Takeaways

  • ✓Ensure price pulls back and makes a higher high before marking a break of structure.
  • ✓Use at least five bars in a pullback to validate a trend continuation.

Key moments

0:54Identifying a True Break of Structure

“Price respects this low and goes on to make a higher high.”

2:00Using Vela Charts for Validation

“Valid pullback reaction makes a valid BOS.”

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