Trading glossary

Change of character (CHoCH): meaning in trading

A change of character (CHoCH) is the first break of market structure against the trend: proof a move may have turned.

In an uptrend price makes higher lows. When a candle closes below the most recent higher low, the trend’s character has changed: sellers have taken control, at least for now.

How we use it

After the Asia high is swept, we wait for a candle to close back inside the range and through the last higher low before the sweep. That is the CHoCH. No CHoCH, no trade.

Then we don’t chase it: we wait for price to pull back toward the level it broke.

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