Change of character (CHoCH): what it is and how to spot one
By Bec, futures trader and founder of Wildflower · Updated
A change of character (CHoCH) is the first break against the trend. In an uptrend, it’s a candle closing below the latest higher low. In a downtrend, it’s a candle closing above the latest lower high. Traders read it as the first sign the trend may be changing.
Why it’s called a change of character
Traders describe a trend by its The pattern of swing highs and swing lows on a chart. Traders use it to say whether price is rising, falling or moving sideways.More in the glossary: the pattern of swing highs and swing lows. An uptrend makes higher highs and higher lows. As long as that holds, the trend has the same “character”.
The first time price closes past a swing the other way, the pattern breaks. In an uptrend, that’s a close below the latest higher low. The trend’s character has changed, so traders call it a change of character, or CHoCH (said “chock”).
It doesn’t mean the trend has reversed. It means the old pattern didn’t hold this time.
How to identify a change of character, step by step
1. Name the trend
Mark the swing highs and lows. Here, a higher low (HL) and a higher high (HH) make an uptrend.
2. Mark the latest higher low
Find the A dip on the chart: a candle whose low is below the lows of the candles on both sides of it.More in the glossary that came just before the latest high. Draw a line there.
3. Wait for a close below
Watch for a candle to close below the line. A wick alone doesn’t count.
4. That’s the change of character
The first close below the latest higher low. The uptrend’s pattern is broken.
In a downtrend, flip it. Mark the latest lower high, and wait for a close above it.
Bullish and bearish change of character
Bearish CHoCH. After an uptrend, a candle closes below the latest higher low.
Bullish CHoCH. After a downtrend, a candle closes above the latest lower high.
What counts, and what doesn’t
It needs a close. A wick below the higher low that closes back above is often called a A quick move past an earlier high or low that then closes back inside it.More in the glossary, not a change of character. A few traders count a wick. It’s your rule.
It goes against the trend. A close above the latest high in an uptrend goes with the trend. That’s a A candle closing past the latest swing high in an uptrend, or past the latest swing low in a downtrend.More in the glossary.
Which low? Most definitions use the swing low that led to the latest higher high. Some traders use any recent swing low, which gives more, smaller changes. There’s no single rule.
Big swings and small swings. A change of character in the small swings inside a pullback can happen while the big trend stays the same. Some traders only count one that breaks the big swings. Others mark both.
There has to be a trend first. In a sideways range, there’s no pattern to break, so there’s no change of character.
Timeframe matters. A change of character on a 1-minute chart may be a small pullback on a 1-hour chart.
Market structure shift (MSS) and displacement
Inner Circle Trader, a trading educator whose names for chart patterns, like fair value gap, are now widely used.More in the glossary traders often say market structure shift, or MSS. Many use it as another name for a change of character. Some keep MSS for a stricter version: the break has to come with A strong, fast move in one direction, often one big candle.More in the glossary, a strong, fast move.
A move that fast often leaves a A price range that a fast move skips over, found with three candles in a row whose first and third wicks don’t overlap.More in the glossary, a price range the candles skip over. Some traders want to see that gap before they call it a shift. How strong counts as strong is your choice. Read about fair value gaps.
What can happen after a change of character
A new trend forms. Price bounces to a lower high, then makes a lower low. Now the swings point down. The next close below a low, with the trend, is a break of structure.
The old trend comes back. Price climbs and closes above the earlier high. The change didn’t last.
Sideways. Price goes back and forth, and there’s no clear pattern for a while.
Some traders wait for the lower high before they treat a change of character as a new trend. Some look for an The last candle that moved the other way before a strong move, often marked as a zone traders watch.More in the glossary or a fair value gap left by the break. A change of character can’t tell you which of these will happen.
Where the term comes from
Change of character comes from smart money concepts, which grew out of ICT’s teaching. Market structure shift is ICT’s own name for the idea. Reading trends as higher highs and higher lows is much older, and goes back to Dow Theory.
CHoCH vs BOS, and more
Break of structure (BOS). A break with the trend: a close above the latest high in an uptrend. A CHoCH is the first break against it. After a CHoCH, breaks in the new direction are BOS. Read about break of structure.
Liquidity sweep. A wick past a swing that closes back inside. Many traders look for a sweep of a high first, then a change of character. They’re two different events. Read about liquidity sweeps.
Reversal. A change of character is one close past one level. A reversal means the trend has turned, which you can only say later.
Double top. A classic chart pattern of two highs at about the same price. Its neckline break can line up with a change of character, but it’s drawn a different way. Read about double tops.
Change of character indicator for TradingView
Have every change of character marked for you, to your own rules
Keeping track of the trend and the latest higher low on every chart is a lot to hold in your head. Instead, tell Wildflower’s Indicator what you want in plain words, like “mark the first close below the latest higher low in an uptrend, with swings found using the number of candles I choose on each side, and only in the sessions I pick”. No coding needed. It marks every change on a chart so you can check it matches your rules. Then it gives you a script to add to TradingView, with a step-by-step guide.
Try it free. You only pay when you add it to TradingView.
Common questions
What does CHoCH stand for?
Change of character. It’s said “chock”.
What is a bearish change of character?
After an uptrend, a candle closing below the latest higher low.
What is a bullish change of character?
After a downtrend, a candle closing above the latest lower high.
What’s the difference between CHoCH and BOS?
A CHoCH is the first break against the trend. A BOS is a break with the trend.
Is a market structure shift the same as a change of character?
Often, yes. Some ICT traders keep MSS for a change of character made with a strong, fast move.
What is a higher low?
A swing low above the swing low before it. In an uptrend, each dip stops higher than the last one.
Which low do I use for a bearish change of character?
Many traders use the swing low that led to the latest higher high. A close below it breaks the uptrend’s pattern.
Does a change of character mean the trend has reversed?
No. It means the old pattern broke once. The trend may turn, go sideways or carry on.
Does a CHoCH need a candle close?
Many traders say yes. A wick that closes back inside is often called a liquidity sweep instead.
Which timeframe is best for a change of character?
There’s no best one. Each timeframe has its own swings, so each can show its own changes.
Can I get a CHoCH indicator for TradingView?
Yes. Describe your rules in plain words and Wildflower builds the indicator. Preview it free on a chart, then pay only when you add it to TradingView. See the Indicator.