Price Action Toolkit: Market Structures

Market structures are essential for traders to identify trends and reversals. The Price Action Toolkit will automatically detect and plot a Break of Structure (BOS), Change of Character (CHoCH), and Change of Character Plus (CHoCH+). Below we’ve outlined how each setting and feature works.

Types of Market Structures

Break of Structure

A Break of Structure (BOS) is used to confirm an asset’s trend will continue in its current direction.

Change of Character

A Change of Character (CHoCH) indicates a change in the current market structure suggesting that the current trend is likely to reverse or lose momentum.

Change of Character Plus

A Change of Character (CHoCH+) is a stronger indication of a trend reversal than the CHoCH, since price must fail to form a lower low or higher high before shifting direction.

Settings

Swing Length

The swing length setting determines the number of bars used to identify significant highs and lows, which are then used to detect market structures.

CHoCH Candle Coloring

When enabled candles will be colored according to the most recent CHoCH.

CHoCH+ Candle Coloring

When enabled candles will be colored according to the most recent CHoCH+.