Change of character
CHoCH: the first crack
A change of character (CHoCH) is the first break against the trend. In a downtrend, it is the first close above the last lower high. It warns that sellers are losing control, but it is an early signal, not a guaranteed reversal.
Test yourself
Price was making lower highs and lower lows, then closed above the last lower high. What is this?
A change of character (CHoCH)The first close against the trend, through the last lower high, is a CHoCH.
What is the difference between a BOS and a CHoCH?
BOS continues the trend; CHoCH is the first break against itSame mechanic (a close through a swing), different direction relative to the trend.
After a CHoCH, what do careful traders usually wait for?
Confirmation, like a pullback that holds and a new breakA CHoCH can fail. A pullback that holds and new structure in the new direction adds confirmation.
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