ICT Market Structure: Swing Points, BOS and MSS

ICT market structure is the pattern of swing highs and swing lows that shows which way price is being delivered, and the market structure shift (MSS) is ICT’s warning of a possible reversal: a forceful break of the last short-term swing, after price has first run the stops beyond an old high or low. Retail Smart Money Concepts adds two more labels, the break of structure (BOS) and the change of character (CHoCH). This guide teaches ICT’s version first, then shows where those labels fit.

New to ICT? Start with What is ICT?

What is ICT market structure?

ICT market structure is the map of swing highs and swing lows on a chart, read to judge which way price is moving and where it may reverse. Many other ICT ideas are read against it: liquidity rests beyond these swings (ICT Liquidity), fair value gaps appear when price breaks them with force (ICT Fair Value Gap), and a dealing range is measured between them (ICT Premium and DiscountComing soon).

ICT is clear that structure alone is not enough. “Market structure is not the be all end all, it’s not the panacea”, he said in 2021, “now it does provide framework” 3:39. He reads it together with liquidity and imbalance, which is why the liquidity guide comes straight after this one.

Swing highs and swing lows

A swing high is three candles where the middle one has the highest high, and a swing low is three candles where the middle one has the lowest low. ICT calls it a “very simple little pattern but it means a lot when it’s in the proper context” 9:56.

A swing is only confirmed when the candle after the middle one closes. Of a swing low he says it “forms once this candle closes” 17:53. Looking back at a finished chart makes every swing look obvious; in real time, you wait for that close.

ICT ranks swings in three sizes, starting from Larry Williams’s definitions 17:39 and adding a rule of his own. Highs are shown here; lows are the mirror.

The long-term high is “generally going to be linked to a higher time frame, daily chart” 29:39, in ICT’s words. Many charting tools use a five-candle swing instead, two candles each side: it marks fewer, bigger swings, but confirms them later.

Trend: higher highs and higher lows

An uptrend is a run of higher highs and higher lows, and a downtrend is a run of lower highs and lower lows. Traders shorten them to HH, HL, LH and LL. ICT calls this “classic market structure” 4:25 and says it is not enough on its own; it is the starting vocabulary the market structure shift builds on.

In an uptrend, traders watch the last higher low: while it holds, the uptrend is intact. In a downtrend, they watch the last lower high.

Break of structure: the trend carrying on

A break of structure (BOS) is the retail Smart Money Concepts name for price breaking a swing in the direction of the trend: a new higher high in an uptrend, or a new lower low in a downtrend. ICT does not use the term in the lectures we checked, and has no separate name for a with-trend break.

A BOS tells you the trend is still in charge, and nothing more. It is not an entry on its own.

What is a market structure shift?

A market structure shift (MSS) is ICT’s name for a break of the most recent short-term swing against the trend, made after price has first run the stops beyond an old high or low. In his words, for the bearish case: “if you’re bearish and you see price run above an old high, then it breaks below the old high and takes out a short term low prior to that run above” 20:52.

1. The run. Price trades above an old high (or below an old low) and takes the stops resting there.
2. The break. It reverses and breaks the short-term low (or high) that formed before the run.
3. The force. It breaks with displacement: a strong, one-sided move, usually leaving a fair value gap.

The run on stops comes first. A break of the short-term high, ICT says, is “significant only if this run down here has traded into sell stops below an old low” 6:56. His homework for students was to look for stop hunts that lead to market structure shifts 35:48.

A market structure shift is a bias for the day, not a reversal call. In his 2022 mentorship, ICT keeps “shift” for this intraday bias on purpose: “that’s why I’m using the term market structure shift, not market structure break” 2:49. He saves “break” for the bigger event, such as price taking out an intermediate-term low, which he calls “a significant break in market structure” 31:15.

What is displacement?

Displacement is a strong, one-sided move, often a single large candle, that shows price wants to go in one direction. ICT’s picture is an elephant falling into a children’s swimming pool: “you want to see an obvious displacement” 18:49. A slow drift through a swing does not count: “it’s got to be energetic, it can’t be a little lethargic little move” 19:12.

Displacement has no size rule from ICT. Judge it against the candles around it: the move should cover ground quickly and obviously. Its footprint is usually a fair value gap, which price often comes back to; that is the subject of ICT Fair Value Gap.

Wick or close?

A wick is enough to take liquidity, but for the shift itself ICT prefers a candle body that closes beyond the swing. On running an old high, he says “it does not need to close above that” 13:47. On breaking the short-term low, he wants price to “preferably close below that”, and a wick that pokes through and comes back is “not all that convincing” 19:39.

“Preferably” is his word, so treat the close as the standard rather than an absolute rule. A wick through a level is often the run on stops itself, the step before a shift, not the shift.

MSS vs BOS vs CHoCH

MSS, BOS and CHoCH are labels for what broke, which way, and how. Only the market structure shift is ICT’s own term; BOS and CHoCH come from retail Smart Money Concepts.

These words are used loosely online. Some sources treat CHoCH and MSS as the same event; others call CHoCH the early warning and MSS the confirmation, or the other way round. Read the chart, not the label: what broke, which way, after what, and how hard.

Through the Quarterly Theory lens

Quarterly Theory fixes the reference level by the clock. ICT’s swings come in three sizes, and which one a trader marks depends on the chart, so two traders can mark different levels. Quarterly Theory reads the previous quarter’s high and low as the reference instead, so everyone draws the same level.

It has a similar order of events to the market structure shift: one or two of the triad run the previous quarter’s extreme while the rest hold (the SSMT), and price can then reverse. Quarterly Theory also gives the direction: the True Open, the opening price of each cycle’s second quarter. Price above it is premium, below it is discount. SSMT divergence covers it in full.

Through the Quarter Sequence lens

Quarter Sequence keeps ICT’s preference for the close and narrows it to one candle. Its trigger, the qCISD, is a candle body closing back through the body of the SSMT candle that confirms a QS SMT, the name for an SSMT that forms while a chain is live (three or more adjacent nested cycles in the same quarter). It happens on one bar’s close: it is not a break of structure, a change of character or a lasting change of trend.

Read on wicks instead of closes, it becomes a generic, noisy market structure shift again, the same reason ICT trusts a close more than a wick (Wick or close?). The chain says when a close like that is worth reading; direction still comes from the True Opens, never from the chain. What is Quarter Sequence? covers chains in full.