Trading strategies
Change of character (CHoCH)
Definition
The first close beyond a swing against the trend, such as above the last lower high in a downtrend. A warning that the trend may turn, not proof.
Example
Say a downtrend has made lower highs at $74, $70 and $67, with its latest low at $62. A candle that closes at $67.40, above the last lower high, is a change of character. It is only a warning: if the bounce stalls at $68.20 and price then closes below $62, the downtrend has simply resumed.
Hypothetical numbers, for illustration only.
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