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FBOS

FBOS (Failed Break of Structure) occurs when price breaks a market structure level but quickly reverses, indicating liquidity manipulation by Smart Money. This concept helps traders identify potential market reversals and avoid fake breakouts by recognizing patterns that signal a loss of trend strength. By understanding FBOS, traders can position themselves advantageously against retail traders who may be trapped in false breakouts.

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Kernel King
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11 views

FBOS

FBOS (Failed Break of Structure) occurs when price breaks a market structure level but quickly reverses, indicating liquidity manipulation by Smart Money. This concept helps traders identify potential market reversals and avoid fake breakouts by recognizing patterns that signal a loss of trend strength. By understanding FBOS, traders can position themselves advantageously against retail traders who may be trapped in false breakouts.

Uploaded by

Kernel King
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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FBOS – Failed Break of Structure (Smart Money Concepts)

What is FBOS?

FBOS (Failed Break of Structure) occurs when price appears to break a market structure level
(swing high/low) but then quickly reverses, failing to continue in the breakout direction.

It’s a sign of liquidity manipulation — Smart Money intentionally pushes price past a key
level to trap breakout traders, grab stop losses, and then reverse the market.

Why FBOS Matters in SMC

FBOS is an early sign that:

• The existing trend is losing strength

• A Change of Character (CHoCH) or market reversal is likely

• Smart Money is manipulating breakout traders

This concept helps SMC traders avoid fake breakouts and position themselves with institutional
flow.

How to Identify FBOS

Here’s the key pattern:

1. Price breaks a structure level (e.g., a previous high)

2. Traders enter expecting BOS

3. Price fails to hold above/below that level

4. Market quickly reverses and breaks the opposite structure

5. This becomes an FBOS → setting up for a CHoCH

Example of Bearish FBOS (Fake Bullish Breakout)

1. Price breaks above a previous swing high


2. Breakout traders enter long

3. Price immediately reverses down

4. Then it breaks the previous higher low

5. FBOS + CHoCH → Market is now bearish

Example of Bullish FBOS (Fake Bearish Breakout)

1. Price breaks below a previous swing low

2. Traders enter short

3. Price quickly reverses up

4. Then it breaks the previous lower high

5. FBOS + CHoCH → Market is now bullish

FBOS vs BOS vs CHoCH

Concept Break Holds? Signal Type Meaning

BOS Yes Trend Continuation Market moves with the trend

FBOS No Trap / Liquidity Grab Market reverses after fakeout

CHoCH Yes (in opposite direction) Reversal Confirmation Confirms trend reversal

Common FBOS Traps

• News breakout trap: A sudden spike breaks structure, hits SLs, and reverses

• Session open trap: London/NY breaks high/low, then pulls back hard

• Equal highs/lows: Smart Money breaks them only to reverse

How to Use FBOS in Your Trading

1. Wait for structure break (swing high/low)


2. Watch if price holds above/below (BOS) or rejects quickly (FBOS)

3. If FBOS, prepare for reversal:

o Confirm with CHoCH

o Look for entry at OB, FVG, or mitigation zone

4. Set SL above/below liquidity grab

5. Target the opposite liquidity zone

FBOS Example (Bearish)

• Market in uptrend → price breaks previous HH

• Traders go long → thinking BOS

• Price quickly reverses, breaks previous HL (CHoCH)

• FBOS detected → go short at OB on retrace

• TP = next sell-side liquidity

Tips for Mastering FBOS

• Use multiple timeframes: Identify FBOS on lower TFs after higher TF liquidity sweep

• Combine with:

o Liquidity pools

o Order Blocks

o Session timing

• Be patient. FBOS traps are quick and precise — don’t chase.

Final Thought

“FBOS is Smart Money’s trapdoor — if you know it’s fake, you can profit when others lose.”

Mastering FBOS lets you catch reversals before retail traders even realize they’ve been
trapped.

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