Break of Structure

Glossary · Technical Analysis

A break of structure is a candle close beyond the swing high or swing low that defined the current trend — above the last lower high in a downtrend, below the last higher low in an uptrend. It is the first objective evidence that the sequence has changed, as opposed to a wick that probed the level and came back.

"A wick through the level is a rumour; a close through it is the news. Trade the news."

Say an uptrend has made higher lows at $90, $94 and $97. Price pulls back and prints a 4h candle that closes at $96.40 — below the $97 swing low. That close is the break: the uptrend's defining sequence is broken, and the next lower high is the level to watch for a trend change. A wick to $96.20 that closes at $97.60 is not a break; it is a stop hunt of the people who put stops exactly at the swing low.

Our setups resolve stops on completed candle closes for the same reason, and the difference is not cosmetic: in our ledger, wick-based stops took out trades that then went to target. The trap in the other direction is trading the first break — the first close through structure often retests the broken level before continuing, which is the entry with a defined invalidation rather than the break itself.

Read the structure off a live chart

Related jargon

Questions

What is Break of Structure in crypto trading?

A break of structure is a candle close beyond the swing high or swing low that defined the current trend — above the last lower high in a downtrend, below the last higher low in an uptrend. It is the first objective evidence that the sequence has changed, as opposed to a wick that probed the level and came back.

How would a trader say it?

A wick through the level is a rumour; a close through it is the news. Trade the news.

Part of the Crypto Jargon glossary — every term, decoded the way a trader would say it.

Crypto Jargon

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