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Choch

HOW TO TRADE CHOCH IN FOREX - SMART MONEY TRADERThe "Change of Character" (ChoCh) is a trading concept used to identify potential trend reversals in financial markets. It signifies a shift in market sentiment, such as from bullish to bearish or vice versa. ### Key Elements of ChoCh: 1. **Trend Breaks**: ChoCh occurs when a price trend fails to continue, such as not making a new lower low in a downtrend or a new higher high in an uptrend. 2. **Volume Spikes**: An unusual increase in trading volume accompanying a price movement can indicate a ChoCh. 3. **Candlestick Patterns**: Patterns like engulfing or doji candles can signal a shift in market sentiment. ### Trading Strategy: 1. **Identify Points of Interest (POIs)**: Use higher time frames to find significant levels like order blocks or support/resistance areas. 2. **Analyze Lower Time Frames**: Look for changes in trend around these POIs, using signs like price failing to break previous highs/lows. 3. **Entry Points**: Enter trades aggressively after a ChoCh is identified or conservatively after a return to the fair value gap created during the ChoCh. 4. **Stop-Loss and Take-Profit**: Set stop-loss orders just beyond reversal points and take-profit targets at next significant levels or using a fixed risk-reward ratio. 5. **Confirmation**: Use additional indicators like RSI or Moving Averages to confirm ChoCh signals. ChoCh helps traders anticipate market reversals and make informed trading decisions across various markets, including forex, stocks, and cryptocurrencies.
Education
by FrankFx14
CHOCH vs BOS ‼️WHAT IS BOS ? BOS - break of strucuture. I will use market structure bullish or bearish to understand if the institutions are buying or selling a financial asset. To spot a bullish / bearish market structure we should see a higher highs and higher lows and viceversa, to spot the continuation of the bullish market structure we should see bullish price action above the last old high in the structure this is the BOS. BOS for me is a confirmation that price will go higher after the retracement and we are still in a bullish move WHAT IS CHOCH? CHOCH - change of character. Also known as reversal, when the price fails to make a new higher high or lower low, then the price broke the structure and continue in other direction.
OANDA:XAUUSDEducation
by Snick3rSD
4
Understanding Smart Money Concepts: CHoCH and BOS entriesIf you were a trader like me, that was having a hard time understanding Change of Character and Break of Structure concepts for a long time, I hope that this example gives you clarity to be able to identify entries better. So let's begin! The first thing you want to identify are high timeframe points of liquidity (AT, BELOW or NEAR) highs and lows. In this example, we have identified a clear zone around 14800 and 14700 on the 4hr chart. Once price dips into that area, we take things down into the 1min timeframe to look for a structural SMC analysis. This next chart shows you how to come up with specific structural points that will give you a better clue about a potential reversal (as in our case) or continuation. In this idea, we will specifically talk about reversals. In any reversal near a point of interest, it is important for price to develop both a CHoCH, and BOS. The BOS is necessary so that price shows us a clear demand to continue the trend upward. It is important to note, in the 1 min chart in my example, that once price has shown a CHoCH, price MUST come back to (or below) the price where the CHoCH broke out from, and create a new higher high (BOS). Next, we wait for price to retrace at or below the CHoCH breakout, and RESPECT a liquidity point of entry (an FVG or an Order Block). Price must NOT confirm a CANDLE BODY below the lowest low on this retracement. It is important to point out that there are occasions where the retracement from the high of the BOS actually comes all the way down to the low, breaks price with ONLY A WICK. This is to be understood as a grab of liquidity only, because a candle body did not confirm below the low. From there, our entrance will either be at the high of a structure that was made WITHIN the BOS retracement, OR (like in our case there were not visible structures for entry) we can take a trade at the 50% premium discount zone, with our STOP at or a bit below the low the BOS made, target the high of our entire structure to the upside in the main chart. I hope this tutorial helped some of you that have been struggling to understand smart money concept entries be able to have a better understanding of how and when to enter into trades at key reversal points of interest. If you felt that this was useful, please drop a like on this idea.
CME_MINI:NQ1!Education
by Zulu_Kilo
3
How to trade Smart Money Concepts:Smart Money Concepts is a more sophisticated way of trading price action, while taking advantage of where institutions are likely to place their orders. This makes Smart Money Concepts a usable tool whenever you are dealing with hedge funds. What you are about to read is an elaborate tutorial explaining a lot about this trading strategy, including some trading strategies (NOTE: there are many SMC indicators and the one I’ll be using is the one by LuxAlgo since I believe is the most “complete” out of all). Let's start. 1) Order Blocks: Order Blocks are, in my opinion, the most important feature in SMC trading, as it shows where these institutions are likely to place their orders. In order for an order block to form, look at where the market is consolidating, creating an area of volume price is likely to be attracted to (some order blocks are formed due to imbalances in the market). In this image, you can see how order blocks are formed right after a ranging market has been broken. Because of this unique feature, order blocks are not the same as support/resistance zones. In order for us to trade using order blocks, look for where an order block has been formed recently, as the longer an order block survives, the weaker it becomes. Buy when the candle that hit the order block closes and set your stop loss under that order block. In this example it worked since the volume wasn’t too high and the order block had formed a few candles before the retest. You can do this for shorts as well (NOTE: the more retests the order block gets, the weaker it becomes) 2) BOS & CHoCH: Supports and resistances usually apply on Price Action, but they can be applied in Smart Money Concepts as well. The difference is that in Smart Money Concepts, you these supports and resistances when the price breaks through them. However, in many occasions these signals can be false and it’s only a retest of the support/resistance. In order to understand what BOS/CHoCH means, we need to look at the graph: This is an example I made. From the graph, a BOS or a Break of Structure is whenever the price breaks the most recent support/resistance in the direction of the trend direction(bullish/bearish). A CHoCH or a Change of Character is whenever the price breaks the most recent support/resistance in the direction opposite of the trend direction. What I mean by this is that in the example I have shown, the trend was bullish until it was not. Normally a bullish trend breaks the resistances instead of the supports, and vice-versa. This is why the name Break of Structure since the price continues going the direction it wants while solving any “issue” in its path. If this “issue” is big enough to break the support/resistance maintaining the trend intact, then it’s known as a Change of Character , since it changes the character of the trend. When this happens, there is a chance for a trend reversal to happen, which is the case for the example I’ve shown. Now I’ll show how to trade BOS/CHoCH in a real graph. As you can see from the chart, there are a lot of Breakthroughs of Structure and Changes of Character, but this indicator actually shows which of these BOS/CHoCH are major. The trick is that if the indicator shows a BOS/CHoCH marked by a straight line instead of a bunch of lines, this means that it is more accurate. In this example, we ignore the smaller BOS/CHoCH and just look at the 2 important ones. We know they are important because they are marked by a straight line. You buy after the CHoCH/BOS label appears and when the candle that retested the broken resistance/new support closes and the volume doesn’t increase before that (unless the market is ranging after it broke). Same thing with shorts. You short after the BOS/CHoCH label appears when the candle that retested the broken support/new resistance and the volume doesn’t increase from the candle before that. 3) EQH/EQL: In Price Action , there are chart patterns. One of the most known ones are the double top and the double bottom . Smart Money Concepts refers to these double tops/bottoms as Equal Highs and Equal Lows (EQH/EQL for short). Here’s an example: As you can see, there is a double top (EQH) which came after an uptrend, meaning that there is a chance that the price will break the necklace (the support line made in the middle of the double tops), causing a change of character, which it did. Due to the nature of double tops and bottoms, this rarely happens. You should use this tool in confluence with other SMC tools like Order Blocks and BOS/CHoCH. Personally, I don’t use them much. I just use them to identify strong supports and resistances, as well as double tops and bottoms. They could also be used to identify trend reversals on major areas of support and resistance. 4) Premium and Discount zones: Premium and Discount zones are ranges that form in the market when a recent major support and resistance has been established. In this example, you can see when did the premium and discount zones form. The price made a major support and resistance. The equilibrium zone is the 50% line in the Fibonacci Retracement tool if you pay close attention. This means that price can react off of the Equilibrium zone, and if you pay close attention, you can see it was ranging for a while. For a trading strategy, wait for the price to reach the Premium or Discount zones, and, if the market's volume decreases, enter a trade and set your take profit at the equilibrium zone. The reason why you should set your take profit at the equilibrium zone is because there is a chance the price rejects off of the equilibrium zone. 5) Fair Value Gaps: Fair Value Gaps are imbalances that form in the market and can be good support/resistance areas. They usually form when the market is volatile and when a breakout or retest just happened. In order to identify what a fair value gap is, look for a huge candle body like the one shown in the picture, then, draw a rectangle with its base being at the highest point of the previous candle's upper wick and with its top being the lowest point of the following candle's lower wick. Now, extend the rectangle to the right and now you have a fair value gap. For a trading strategy, look for the line in the middle which is shown in the fair value gap. This line acts as a support, and the price can bounce off of it. For an entry point, wait for the price to react to the fair value gap, and, if the volume decreases while the reaction is happening, enter. 6) Liquidity Grabs: Even if you think your trading strategy is amazing, you will always have to deal with scams. No matter how good your trading strategy is, all trading strategies fail to deal with hedge funds and whales. They sometimes act when the price is very close to a support or resistance, and when the people expect a bounce, they place their stop losses under the area of confluence. These hedge funds then act, and end up manipulating the market, forcing the people to panic buy or panic sell, depending on the area of confluence. One major example of market manipulation is in the Crypto Exchange. Trading Crypto is almost like gambling. Liquidity grabs perfectly reference the scam. You can spot them if, on a ranging market, there is a sudden increase or decrease in price. Always pay attention to traps like the ones in these examples shown below: For a trading strategy, wait for the scam pump or dump to stagnate and then enter your trade in the opposite direction that the candle was going to. In conclusion, Smart Money Concepts is a fascinating trading strategy for me, and it could be for you too. There are many aspects of it, and it is another way of trading Price Action, which itself is already fantastic. This tutorial took me 3 hours to make, so please make sure to heart and comment your opinion on this. Thank you for reading through all of this.
BITSTAMP:BTCUSDEducation
by lorinstocksinvesting
15
📊 Market Structure: BOS VS CHOCH📊What is market structure? Market structure is the levels that are created by the price of any currency as it moves up and down. Price never moves in a single direction for too long. It always takes a few steps in one direction, then moves a few steps back, then a few more steps, then a few steps back. Over time, these steps form distinct structures in the market: zones of consolidation, zones of support, zones of resistance, and zones where price impulses up and down. Market structures that form in the past are often respected in the future, and analyzing previous market structure can form a basis for a trading plan. BoS carries on in the same direction it was initially heading in where as a CHoCH can be viewed as the Markets turning point 🔷BOS - Break of structure forms in the direction of the trend creating continuation patterns. Break of recent Lower Low when bearish or break of recent Higher High when bullish. 🔶CHOCH - Change of character form at the end of a trend. For example, if we see an uptrend in the market, characterized by higher highs and higher lows, this means that the overall trend remains bullish. However, when a new high is formed and then impulsively broken to the downside, this could signal that the bullish trend might be coming to an end, and that a possible choch transition may be happening. 👤 @algobuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
Education
by QuantVue
7
10 Minutes Learn BOS & ChochBOS and Choch Break Of Structure and Choch is next level of market structure.So, if you want to learn this, you need to learn market structure first it will goes easy to find BOS and Choch when you understand or master at market structure If you want to trend following, market structure is enough,but if you want to find reversal pattern, Choch and BOS is Usefull What is BOS? Break Of Structure forms in the direction of the trend creating continuation patterns for you to joint the trend Break of recent Lower Low when bearish or Break of recent Higher High when bullish Example: What is Choch? Change Of Character for at the end of a trend forming reversal patterns to give you a chance to join the new change of bias in the market. will usually form a head and shoulders pattern also reverse head and shoulders when bearish How to indicate, you need to find the last Lower High ( when bearish ) and Higher Low ( when bullish ).so,when the price close above the last Lower High or Lower Low, this pattern has formed Below, is step by step how to using Choch 1. Determine the market structure first 2. Determine the BOS correctly 3. Determine the Choch, i change the color to green because of bullish trend require break of Choch Note : be careful, this part is often wrong! you should watch the last BOS to determine the Choch 4. Look! We got it Note : The higher timeframe close above the choch,then the confirmation is getting stronger Easy to learn ya, thanks for reading my page! Hope it usefull!
Education
by Ivannn7
1
Key to unlock the true market structure!!!Have you been struggling with marking market structure? You may have come across many Youtubers who aim to teach the market structure, but in a very wrong manner either by taking fibonacci tool or by discretion. This Video can be an eye opener for you all who are struggling in marking valid market structure. Market structure is the backbone for every other SMC concepts. Without market structure there will be no orderblocks, breakers etc. Even if you are a beginner in market structure, that is much better since you won't be acquiring the wrong knowledge in the 1st hand. So are you ready to uncover the real mechanical market structure? Video will be uploaded on YT at 6:30AM GMT on 25th November 2022 Subscribe our YT channel to never miss any content from Lamda Trading. Happy Trading!!! -Team Lamda
Education
by lamdatrading
1
CHOCH vs BOS ‼️WHAT IS BOS ? BOS - break of strucuture. I will use market structure bullish or bearish to understand if the institutions are buying or selling a financial asset. To spot a bullish / bearish market structure we should see a higher highs and higher lows and viceversa, to spot the continuation of the bullish market structure we should see bullish price action above the last old high in the structure this is the BOS. BOS for me is a confirmation that price will go higher after the retracement and we are still in a bullish move WHAT IS CHOCH? CHOCH - change of character. Also known as reversal, when the price fails to make a new higher high or lower low, then the price broke the structure and continue in other direction.
Education
by Snick3rSD
CHOCH vs BOS ‼️WHAT IS BOS ? BOS - break of strucuture. I will use market structure bullish or bearish to understand if the institutions are buying or selling a financial asset. To spot a bullish / bearish market structure we should see a higher highs and higher lows and viceversa, to spot the continuation of the bullish market structure we should see bullish price action above the last old high in the structure this is the BOS. BOS for me is a confirmation that price will go higher after the retracement and we are still in a bullish move WHAT IS CHOCH? CHOCH - change of character. Also known as reversal, when the price fails to make a new higher high or lower low, then the price broke the structure and continue in other direction.
OANDA:XAUUSDEducation
by Snick3rSD
2
🤓 🤓 MARKET STRUCTURE SHIFT! SMCMarket structure in Forex trading or price action is how many people take advantage of the markets. No indicators, and no volume. Because the market does not have a centralised exchange. Forex traders often swing trade the market based on the structure to take advantage of the opportunity. Structural market change is broadly defined as a shift or change in the way in which a market or economy functions or operates. I have tried my best to show you in the easiest possible way to look out for. Save this to your notes for future reference.
OANDA:SPX500USDEducation
by benoc_
12
CHOCH vs BOS ‼️WHAT IS BOS ? BOS - break of strucuture. I will use market structure bullish or bearish to understand if the institutions are buying or selling a financial asset. To spot a bullish / bearish market structure we should see a higher highs and higher lows and viceversa, to spot the continuation of the bullish market structure we should see bullish price action above the last old high in the structure this is the BOS. BOS for me is a confirmation that price will go higher after the retracement and we are still in a bullish move WHAT IS CHOCH? CHOCH - change of character. Also known as reversal, when the price fails to make a new higher high or lower low, then the price broke the structure and continue in other direction.
Education
by Snick3rSD
7
Differences in Philip & CHoCH Scenarios When an area is immediately broken we will have ( CHoCH ) . When an area on the opposite side is consumed and the price returns, we expect the area that caused the failure to be consumed at the time trigger. When an area reacts but cannot break the surface, we have ( FILIP ) . When the price breaks the opposite areas and consumes one and returns, we expect in the time trigger to consume the area that caused the failure. Continued ENTER Two modes occur. We either lost the Filip or ( CHoCH ) scenario and are waiting for it to return. Or a high time zone is broken by a lower time trigger where we expect orders to continue flowing.
Education
by mohamadrezaKhorsand
3