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Change of Character Plus (CHoCH+) Explained

Change of Character Plus (CHoCH+) Example and Defintion.

A Change of Character Plus (CHoCH+) indicates a strong confirmation of change in the current market structure suggesting that the current trend is likely to reverse or lose momentum. A bullish CHoCH+ indicates that the current market structure will shift from bearish to bullish, leading to an increase in price. A bearish CHoCH+ indicates that the current market structure will shift from bullish to bearish, leading to a decrease in price. The CHoCH+ is a stronger indication of a trend reversal than the CHoCH, since price must fail to form a lower low or higher high before shifting direction.

How to find a Change of Character Plus (CHoCH+)

Bullish CHoCH+ example and Bearish CHoCH+ example

A Change Of Character Plus (CHoCH+) is formed when price fails to form a higher high or lower low before reversing. This failure signals a strong shift in the order flow, indicating a reversal of an asset's trend.

Bullish CHoCH+

Valid Bullish CHoCH+ example and Invalid Bullish CHoCH+ example

A bullish CHoCH+ is formed when a low (L) occurs, followed by a lower high (LH), then a failed lower low (LL), and finally, a higher high (HH) that breaks the previous lower high.

Bearish CHoCH+

Valid Bearish CHoCH+ example and Invalid Bearish CHoCH+ example

A bearish CHoCH+ is formed when a high (H) occurs, followed by a higher low (HL), then a failed higher high (HH), and finally, a lower low (LL) that breaks the previous higher low.

Trading using a CHoCH+

A ChoCH+ is interpreted as a directional change in the market trend: bullish to bearish or bearish to bullish. This means that traders can use the CHoCH+ as an exit or entry point. A trader in a bullish position may use the formation of a bearish CHoCH+ to exit their long position; similarly, traders who are short may use the formation of a bullish CHoCH+ to exit their position.

Common Strategy using a CHoCH+

Change of Character Plus (CHoCH+) and Inversion Fair Value Gap (IFVG) trade example

After a CHoCH+ forms, market sentiment has shifted, and a trader can have a trend bias. For example, if a bullish CHoCH+ forms, a trader can start to look for long opportunities. It is best to enter on trend pullbacks into pivotal market areas such as a bullish Inversion Fair Value Gap (IFVG), bullish Order Block (OB), Demand Zones, etc. When the price retraces to these areas following a bullish CHoCH+, you can open a long position, expecting buyers to be aggressive.

What is the difference between a ChoCh and a CHoCH+?

A Change of Character (CHoCH) is when a BOS fails, and price moves fail to reach a higher low (HL) or a lower high (LH). A Change of Character Plus (CHoCH+) occurs when a higher high (HH) and a higher low (HL) fail to form or when a lower low (LL) and a lower high (LH) fail to form.

What timeframe is best for a CHoCH+?

Change of Characters Plus (CHoCH+) are typically used on intraday time frames, and can be used on higher intraday time frames, such as the 30 minute, to see larger trend shifts. CHoCH+ can also be used on smaller time frames such as the 1 or 5 minute for a scalping style strategy.