TIPS AND RULES ON HOW TO
IDENTIFY THE CHANGE OF
CHARACTER (CHOCH)
FREE PDF GUIDE
What you need to know when Identifying a CHOCH.
A Change of Character (CHOCH) alludes to a shift in the market's personality. For
instance, if price action is in a downtrend with lower highs and lower lows, this
indicates that the overall trend is still bearish. However, if a new low is made and then
abruptly violated to the upside, meaning when a lower high is violated, this could
indicate that the bearish trend is ending and that a potential change in trend is taking
place. Understanding how a CHOCH works can assist you in identifying potential shifts
in market trends, allowing you to make better trading decisions and risking less to get
a high reward. You can potentially improve your chances of making successful trades
in the within the markets by watching for changes in market behaviour and reacting
accordingly.
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Where and how to use a CHOCH
A Change of Character (CHOCH) is found on every high and low. Meaning that on the
higher high and higher low of a bullish trend there is a CHOCH, and same applies for a
bearish trend, on the lower high and lower low of a bearish trend there is a CHOCH. A
change of character can be used to catch longs (buys) on a bearish trend to the supply
and shorts (sells) on a bullish trend to the demand. It can be also used as a
confirmation entry and to increase your risk to reward ratio, in a sense that you are
risk less for higher profits.
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Textbook Examples of a CHOCH.
Bearish to Bullish
Example
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Bullish to Bullish
Example
Real Market Examples of a CHOCH.
Bearish to Bullish
Example
Bullish to Bearish
Example
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Buy to Sell Textbook Example.
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Sell to Buy Textbook Example.
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Properties and Tips of a CHOCH.
Properties
Tips
• A CHOCH is formed when a
LH is violated on a downtrend
• After a LH has been violated
price has to respect the
previous LL for a CHOCH to be
confirmed
• A CHOCH is formed when a
HL is violated on an uptrend
• After a HL has been violated
price has to respect the
previous HH for a CHOCH to
be confirmed
• When a CHOCH is formed it
indicates that price action is
in an unconfirmed trend
• After a CHOCH is formed It
will be advisable to enter of a
flip because by then the trend
will be confirmed
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