How to Spot a FBOS #trading #shorts

28 Apr 2023 · 1 min

Watch on YouTube

1:00

In this YouTube short, The Art Of Crypto explains how traders can differentiate a false break of structure (FBOS) from a confirmed break of structure. The speaker emphasizes that a confirmed break only occurs when the candle body closes above (for bullish) or below (for bearish) the prior swing high or low, regardless of wick length. He describes how market makers may create deceptive price moves—pushing price beyond a swing point only to reverse—to capture liquidity, resulting in a false break. The video also notes that large wicks do not validate a break if the body does not close beyond the swing level. The creator promotes his Twitter handle for more infographics.

Chapters

Now you might be wondering, hey, didn't the price go above this previous high? Shouldn't that be a break of structure? However, you also need to determine if the break of structure is a false break of structure or if it is actually a confirmed break of structure. Now I share a lot of these infographics on Twitter at _TheArtOfCrypto, so make sure you follow me on Twitter if you want to see more of this. But a confirmed break of structure only happens when you get a body close above or below that previous swing low or swing high. In this case, that is a false break of structure because the market makers can always just manipulate the price to go below or above the swing high to take liquidity, right? To take liquidity before they move the market in the other direction, which is— this is going to be a fake move. And it does not matter how big of a wick there is below the level, as long as the body does not close beneath that level, it is considered a false break of structure. So in this case, that would be a false break of structure. This would still be a confirmed break of structure.