Liquidity Sweeps, CHOCH and BOS Explained
Liquidity sweeps, CHOCH and BOS are market-structure concepts used to describe how price interacts with prior highs and lows and whether the prevailing sequence of swings may be changing.
What is a liquidity sweep?
A liquidity sweep occurs when price trades beyond a visible high or low where orders may be concentrated and then reacts back into the prior range. The move alone does not guarantee a reversal.
Context matters: session timing, trend, nearby structure and follow-through all influence whether the sweep becomes meaningful.
CHOCH as an early structural warning
Change of Character, commonly shortened to CHOCH, is used by many traders to describe an early break in the prior short-term swing sequence.
It is best treated as evidence of a possible transition rather than as a standalone buy or sell signal.
BOS confirms continuation or structural acceptance
Break of Structure, or BOS, generally refers to price breaking a significant swing point in the direction of the developing trend.
Combining a liquidity event with subsequent structure can provide a clearer framework than reacting to any single candle or indicator reading.
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