Break Of Structure (BOS) Strategy
Here's a trading strategy cheat sheet for fluid trades traders using premium and discount zones:
Last updated
Here's a trading strategy cheat sheet for fluid trades traders using premium and discount zones:
Last updated
Understanding Break of Structure (BOS)
BOS refers to a price action pattern where the price breaks out of a previously established trading range or structure.
It signals a potential trend change or continuation.
Identifying BOS Setups
Use the SMC Pro indicator to identify well-defined breaks of structures.
Look for a clear breakout of these structures, either to the upside or downside.
Entry Strategies
Bullish BOS (Upside Breakout):
Wait for a clear breakout above the upper boundary of the structure.
Consider entering a long position when the price closes above the resistance level.
Bearish BOS (Downside Breakout):
Wait for a clear breakout below the lower boundary of the structure.
Consider entering a short position when the price closes below the support level.
Exit Strategies
Set a target profit level (e.g., 1-2 times the risk) and exit at least a portion of your position.
Use a stop-loss order to limit potential losses (e.g., below the breakout level for long trades, above the breakout level for short trades).
Risk Management
Start with small position sizes (e.g., 0.5-1% of your account per trade).
Use stop-loss orders to protect against false breakouts or reversals.
Avoid chasing breakouts that have already moved significantly.
Additional Considerations
Monitor the stock's behavior and overall market sentiment throughout the day.
Be aware of potential false breakouts or whipsaws near the breakout levels.
Remember, trading involves risk, and it's essential to practice with a paper trading account before risking real capital. Always start small and gradually increase your position sizes as you gain experience and confidence in your trading strategy.
