What is Change of Character (CHOCH)?
Change of Character (CHOCH) is a core concept in currency trading.
In Smart Money Concepts, a structural shift where price breaches the most recent major swing point contrary to the prevailing trend, signaling a reversal.
Understanding Change of Character (CHOCH) helps you manage your risk and spot high-probability trade setups.
Why It Matters for Forex Traders
In forex trading, Change of Character (CHOCH) helps you protect your capital. It gives you a clear rule to follow instead of guessing.
How to Identify and Apply Change of Character (CHOCH)
- 1Spot and mark Change of Character (CHOCH) on your chart during active trading hours.
- 2Check that the overall market trend agrees with your trade idea.
- 3Always place a protective stop loss before entering any position.
Practical Forex Example
For example, on a EUR/USD trade, applying Change of Character (CHOCH) allows you to set clear entry and exit points before risking real money.
PRO TRADER TIP
Always test strategies involving Change of Character (CHOCH) on a free demo account first before trading with real capital.