Question 1

What is BOS in trading?

Accepted Answer

BOS (Break of Structure) occurs when price breaks a previous significant swing high (bullish BOS) or swing low (bearish BOS). A bullish BOS confirms the uptrend continues — buyers are in control. A bearish BOS confirms the downtrend continues. BOS is one of the foundational Smart Money Concepts used to identify trend direction.

Question 2

What is the difference between BOS and CHoCH?

Accepted Answer

BOS (Break of Structure) confirms trend continuation by breaking in the direction of the current trend. CHoCH (Change of Character) signals a potential trend reversal by breaking against the current trend — in an uptrend, price breaks below the most recent swing low for the first time. CHoCH is the first warning; BOS in the new direction confirms the reversal.

Question 3

What is a Fair Value Gap (FVG) in trading?

Accepted Answer

A Fair Value Gap (FVG) is a three-candle imbalance pattern where the middle candle moves so aggressively that a gap remains between the first and third candle wicks. It represents a price inefficiency that price tends to return and fill. FVGs are high-probability entry zones in Smart Money Concepts trading.

Question 4

What is an Order Block in SMC trading?

Accepted Answer

An Order Block (OB) is the last opposite-direction candle before a strong impulsive move. A bullish OB is the last bearish candle before a strong bullish impulse. A bearish OB is the last bullish candle before a strong bearish drop. It marks where institutional orders were placed and acts as a high-probability support or resistance zone.

Question 5

What is a Liquidity Sweep in forex?

Accepted Answer

A Liquidity Sweep is when price temporarily moves beyond a key level — such as equal highs or equal lows — to collect stop losses before reversing. It is one of the most reliable SMC setups. A sweep of sell-side liquidity (below lows) followed by a bullish BOS is a high-probability long setup in gold and forex trading.

Smart Money Concepts — Complete Dictionary