Change of character (CHOCH)

The first time price closes beyond a swing point against the prevailing trend — the earliest structural sign that control may be shifting.

A change of character is not a reversal signal, and treating it as one is the most common way it is misused. Many resolve back into the original trend.

What it removes is your reason to assume continuation. Confirmation of an actual shift needs new structure forming in the new direction — a CHOCH followed by a break of structure the other way.

Also called: CHOCH, ChoCh.

Taught in

Change of CharacterMarket Structure

The first break against the trend — the earliest structural hint that control may be changing hands.