FVG, BOS and CHoCH explained

Read the structure before the label

BOS describes a break in the direction of an established structure. CHoCH describes a break that may challenge that structure. Both depend on the swings and timeframe used; neither proves a future trend.

An FVG describes a three-candle price imbalance. In the bullish pattern, the third candle’s low sits above the first candle’s high. The bearish pattern reverses that relationship. A gap may later fill, remain open, or be invalidated.

A numerical FVG example

Suppose the first candle’s high is 100 and the third candle’s low is 102, with a strong upward candle between them. The interval from 100 to 102 is a bullish gap under this definition. It is confirmed only after the required candles close; a forming candle can still change.

This is a teaching example, not an asset forecast. Seeing this gap alone says nothing about the liquidity available for your order or the price at which a stop will execute.

Premium, discount and equilibrium

For a selected range from 90 to 110, equilibrium is 100. The lower half is called discount and the upper half premium. These names describe location inside the range, not an independent measure of fair value.

CBX combines range location with its confirmed entry patterns. A rejection near equilibrium and a successful break through it are different situations. Volume and higher-timeframe context can inform the review, but they cannot make either outcome certain.

What a chart cannot establish

Equal highs, equal lows, sweeps, and order-block candidates are chart-based interpretations. Candles alone do not reveal all resting stop orders or prove that an institution caused a move. Treat SMC as a framework for structured observation and testing, not a claim of privileged market information.