🔹 Change of Character
In the framework of the series of articles in which we discuss the concepts of smart money (SMC), and after talking about the term Break of Structure which is used to confirm the continuation of the trend, we move today to a new and important term that is one of the most accurate signals in determining reversal moments in the market, which is Change of Character – or ChoCH.
This term is considered the first alert that there is a fundamental change in market behavior, and it often appears before most traders notice that something unusual is happening.
🔸 What is ChoCH?
Change of Character (ChoCH) is the moment when the prevailing price pattern is broken, causing the market to start moving in the opposite direction.
If the market was bullish, forming higher highs and higher lows, then a clear break of a low indicates that buyers are starting to lose control, and sellers are beginning to emerge. This is not an ordinary break; it is a clear signal that the old structure is starting to change.
🔸 Why is ChoCH important?
Because it represents the beginning of the end for the previous trend. Major institutions do not suddenly change the trend; they start with calculated steps and subtle movements, and ChoCH is the first indication that appears on the chart that there is a change in control.
For the smart trader, this moment is not random. It is an opportunity to prepare, to observe, and sometimes to enter early before the market actually turns.
🔸 The difference between ChoCH and BoS
BoS (Break of Structure) indicates the continuation of the trend.
ChoCH indicates a change in direction.
Thus, ChoCH always comes before the first BoS in the new direction, as if the market whispers to you: "The destination may change."
🧠 Summary
Change of Character is the cornerstone of understanding market shifts. When you see it, it doesn't mean you enter the trade immediately, but it means you now know that the market has started to rearrange its rules, and you have the advantage of understanding that early.
In the next article of the SMC series, we will talk about the concept of Order Blocks – which are the areas where institutions place their main orders, and are considered one of the strongest indicators of the intentions of "smart money."
