Summary of BOS,CHoCH & INDUCEMENT In SMC | HINDI | BANKNIFTY| LECTURE~3

Summary of Video: "BOS, CHoCH & Inducement In SMC | HINDI | BankNifty | LECTURE~3"

This detailed lecture by Gwyer (Nilesh Bhai) focuses on Structure Mapping in Smart Money Concepts (SMC) trading, particularly applied to BankNifty and similar markets. The core concepts discussed are Break of Structure (BOS or Boss), Change of Character (CHoCH or Chowk), and Inducement (IDM or Endorsement). The session explains how these elements interplay to identify market trends, trend changes, and valid trade setups using price action and swing analysis.

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Main Financial Strategies and Concepts

1. Structure Mapping Basics:
   • Structure Mapping involves identifying three key points:
     • Break of Structure (BOS/Boss): Indicates continuation of the current trend by breaking previous highs (in uptrend) or lows (in downtrend).
     • Change of Character (CHoCH/Chowk): Signals a trend reversal or turning point when a key higher low or lower high is broken.
     • Inducement (IDM/Endorsement): Internal swings or pullbacks that confirm the validity of BOS or CHoCH and help in identifying entry points.
2. Trend Identification:
   • Uptrend: Characterized by higher highs and higher lows. BOS occurs when price breaks the previous higher high.
   • Downtrend: Characterized by lower lows and lower highs. BOS occurs when price breaks the previous lower low.
   • A CHoCH happens when a higher low (in uptrend) or a lower high (in downtrend) is broken, signaling a potential trend change.
   • BOS confirms trend continuation; CHoCH confirms trend reversal.
3. Swing and Pullback Analysis:
   • Price moves in swings; internal swings (IDM) are smaller pullbacks within the main structure.
   • IDM confirms the validity of higher highs or lower lows.
   • The left swing of a high or low is critical for confirming IDM and structure points.
   • Valid swings must meet criteria like liquidity grabs (price taking out previous candle highs/lows) and body closes beyond these points.
   • Invalid swings include inside bars that do not break previous highs/lows or lack body closes, making them unreliable for IDM.
4. Rules for BOS, CHoCH, and IDM:
   • BOS and CHoCH require body closes beyond the previous structure for confirmation.
   • IDM does not require body closes; it can be weaker and still valid.
   • IDM always comes from the left side swing of a high or low, never the right.
   • The square/chowk point is the turning point where trend changes.
   • The boss point is where the trend continues after breaking structure.
   • Liquidity grabs are essential for confirming swings and IDM.
5. Structure Mapping Methodology:
   • Start from a higher timeframe (e.g., 30 minutes) and identify the major lows and highs.
   • Zoom out to identify the overall trend and major BOS and CHoCH points.
   • Mark IDM points internally on lower timeframes to confirm swings.
   • Use the BOS, CHoCH, and IDM framework to map the structure continuously.
   • Pay attention to gaps (common in Indian markets) and treat them as single candles for mapping.
   • Confirm BOS and CHoCH only after body closes beyond key levels.
   • Use IDM for precise entries after BOS or CHoCH confirmation.
6. Valid vs Invalid Pullbacks:
   • Valid pullbacks involve price taking liquidity from previous candle highs/lows and closing bodies beyond those levels.
   • Invalid pullbacks fail to take liquidity or close bodies inside previous candles or inside bars.
   • Understanding these helps avoid false signals and poor trade entries.
7. Practical Application:
   • The lecturer uses live charts to demonstrate marking BOS, CHoCH, and IDM.
   • Emphasizes patience and practice to master Structure Mapping.
   • Encourages starting from higher timeframes and moving to lower ones for precision.
   • Explains how these concepts lead to identifying order blocks, fair value gaps, and other advanced SMC concepts in future lectures.

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Step-by-Step Guide to Structure Mapping (as presented)

• Step 1: Zoom out to a higher timeframe to identify the major low or high point (start of the trend).
• Step 2: Identify BOS by spotting where price breaks previous highs (uptrend) or lows (downtrend) with body closes.
• Step 3: Mark CHoCH when price breaks a higher low (in uptrend) or lower high (in downtrend), indicating a potential trend reversal.
• Step 4: Within these structures, identify IDM points by looking for internal

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