Learn Best Change of Character CHoCH Model in Trading with SMC
Most of the SMC traders get Change of Character CHoCH WRONG!
In this article, I will share with you Change of Character models that have a low accuracy and better to be avoided.
I will teach you the best CHoCH model for Forex Gold trading and show you how to identify it easily.
Let's start with the basic theory first and discuss what Change of Character signifies.
Change of Character in Bearish Trend
In a downtrend, Change of Character CHoCH is an important event that signifies a violation of a bearish trend.
CHoCH is confirmed when the price breaks and closes above the level of the last lower high.
Above, is a text book Change of Character model in a bearish trend.
For the newbie traders, such a price action provides a strong signal to buy while it fact it is NOT .
One crucial thing is missing in this model to confirm a bullish reversal.
According to basic trend analysis rules, we say that the market trend is bullish if the price forms a bullish impulse, retraces and sets a Higher Low HH , forms a new bullish impulse with a new Higher High HH.
Only then, we can say that the market is trading in up trend.
CHoCH model above confirms a bearish trend violation BUT it does not confirm a trend change.
Such a model may easily signify a deeper correction.
Look what happened with GBPNZD.
Though the price formed a confirmed bearish CHoCH, it was a false signal and just an extended correction.
That's a perfect bullish reversal model.
It combines CHoCH and conditions for a bullish trend.
Such a union is extremely accurate in predicting up movements.
Examine a price action on USDJPY.
Not only the price formed a confirmed CHoCH but also we see a start of a new bullish trend.
Change of Character in Bullish Trend
In an uptrend, Change of Character CHoCH is a significant event that signifies a violation of a bullish trend.
CHoCH is confirmed when the price breaks and closes below the level of the last higher low.
Above is a typical model of a bearish CHoCH.
For many traders, that is the signal to open short.
However, it is not that accurate and one important component is missing there.
According to basic price action rules, the market trend is bearish
if the price forms at least 2 bearish impulses with Lower Lows LL and a pullback between them with a Lower High LH.
Only when these 3 conditions are met, a bearish trend is confirmed .
Perfect bearish Change of Character model should include both CHoCH and a bearish trend price action. That will confirm a violation of a bullish trend and start of a new bearish trend.
EURCAD has a very strong potential to continue falling:
not only we see a valid bearish Change of Character but also
a start of a new bearish trend based on a price action.
Next time when you identify CHoCH on forex market, make sure that you check the preceding price action. It will help you to more accurate assess reversal probabilities and make a wiser trading decision.
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AUD_JPY LOCAL SHORT|
✅AUD_JPY made a retest of the
Strong horizontal resistance level of 94.800
And as you can see the pair is already
Making a local pullback from
The level which sends a clear
Bearish signal to us therefore
We will be expecting a
Further bearish correction
SHORT🔥
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NZD_CAD SHORT FROM RESISTANCE|
✅NZD_CAD will soon retest a key resistance level of 0.8320
So I think that the pair will make a pullback
And go down to retest the demand level below at 0.8267
SHORT🔥
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AUD-NZD Long From Rising Support! Buy!
Hello,Traders!
AUD-NZD went down but
Will soon retest a rising
Support line from where
We will be expecting a
Bullish rebound and a move up
Buy!
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AUD-CAD Will Go Down! Sell!
Hello,Traders!
AUD-CAD made a retest
Of the wide horizontal
Resistance around 0.8934
And we are already seeing a
Local bearish reaction so
We will be expecting a
Further bearish move down
Sell!
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GBP-CHF Support Ahead! Buy!
Hello,Traders!
GBP-CHF is going down now
And the pair will soon hit a
Horizontal support level below
Around 1.0933 from where
We will be expecting a
Local rebound and a move up
Buy!
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USDCAD - Long triggered We have entered into the discount area of the most recent swing point on USDCAD. With doing this we have taken out all the areas of liquidity within the trading range so it was time to look for potential long moves.
Now at current price we have had a great example of AMD where by we
Accumulate
Manipulate
and then the hope is that we begin to distribute higher.
There was also a nice fair value gap that was left behind on the 5min
So all that was left to do was execute.
Let us see how it plays out.
Win or lose great entry super happy with the trade. Lets see how it goes
EUR-CAD Bullish Breakout! Buy!
Hello,Traders!
EUR-CAD is trading in an
Uptrend and the pair made
A bullish breakout of the key
Horizontal level of 1.5936 so we
Are bullish biased and we
Will be expecting a further
Bullish move up
Buy!
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CAD_CHF RETESTING LOWS|LONG|
✅CAD_CHF will be retesting a support level soon around 0.5830
Which is a deeps low for the pair
From where I am expecting a bullish reaction
With the price going up but we need
To wait for a reversal pattern to form
Before entering the trade, so that we
Get a higher success probability of the trade
LONG🚀
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GBP-NZD Long From Demand Ahead! Buy!
Hello,Traders!
GBP-NZD is making a bearish
Correction but will soon
Retest a wide demand area
Around 2.2539 from where
We will be expecting a
Local rebound a move up
Buy!
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EUR-USD Risky Short! Sell!
Hello,Traders!
EUR-USD made a nice bullish
Move up and has almost reached
A horizontal resistance level
Of 1.1631 and the pair is locally
Overbought so after the retest
A local bearish correction
Is to be expected
Sell!
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AUD_NZD LOCAL LONG|
✅AUD_NZD has retested a key support level of 1.0800
And as the pair is already making a bullish rebound
A move up to retest the supply level above at 1.0820 is likely
LONG🚀
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GBP-AUD Local Short! Sell!
Hello,Traders!
GBP-AUD made a retest of
The horizontal resistance
Of 2.1037 from where we
Are already seeing a bearish
Pullback so we will be
Expecting a further local
Move down
Sell!
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GU: Trading back towards 1.34 today?Hi everyone, hope you've all had a nice weekend.
Looking at GBP/USD this morning, keeping the forecast and analysis simple, but looking at a further bearish run today if we get the right lower time frame price action to confirm...
Looking at a sweep into 1.345 before trading lower, potentially towards 1.34.
Aman
NZD-CHF Rebound Ahead! Buy!
Hello,Traders!
NZD-CHF made a retest
Of the horizontal support
Level of 0.4847 from where
We are already seeing a
Bullish rebound so we are
Locally bullish biased and
We will be expecting a
Further bullish move up
Buy!
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EUR_USD RISING SUPPORT AHEAD|LONG|
✅EUR_USD is trading along the rising support
And as the pair will soon retest it
I am expecting the price to go up
To retest the supply levels above at 1.1511
LONG🚀
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EURUSD - BreakdownApologies video is a bit rushed.
Wanted to get it done before the weekend arrived.
There's so much more to this video and entry reason that I have left out unintentionally like the fact we swept the Asia lows before creating a BoS. There are also a few other things like I have left out but without looking at the chart right now I cannot remember off the top of my head.
I will post the idea of this trade below so you can see that I was taking it before it played out.
Hope you all have a great weekend and a better trading week than you had this week.
Enjoy
P.S if you have any questions please do message
EUR-CHF Resistance Ahead! Sell!
Hello,Traders!
EUR-CHF keeps growing
But a strong horizontal
Resistance level is ahead
Around 0.9443 so after
The retest we will be
Expecting a local pullback
And a local bearish correction
Sell!
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EUR_GBP WILL KEEP GROWI|LONG|
✅EUR_GBP broke the key horizontal level of 0.8540
Which is now a support then went down
To retest it and we are now seeing
A bullish reaction so I think that
The pair will go even higher up
LONG🚀
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NZD-USD Bearish Breakout! Sell!
Hello,Traders!
NZD-USD broke out of the
Rising channel and then made
A bearish breakout of the
Horizontal key level too
Around 0.0602 which is
Now a resistance, then
Made a pullback and retest
And is going down again which
Reinforces our local bearish bias
And we will be expecting a
Further bearish move down
Sell!
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Check out other forecasts below too!
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AMAZON Local Short! Sell!
Hello,Traders!
AMAZON made a retest
Of the horizontal resistance
Around 219$ and the stock
Is already making a local
Bearish pullback so a further
Bearish correction
Is to be expected
Sell!
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Check out other forecasts below too!
Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.