Change Of Character (CHoCH) Strategy
Here's a trading strategy cheat sheet for fluid trades traders using the Change of Character (CHoCH) approach:
Last updated
Here's a trading strategy cheat sheet for fluid trades traders using the Change of Character (CHoCH) approach:
Last updated
Understanding Change of Character (CHoCH)
CHoCH refers to a price action pattern where the character or behavior of a stock's price movement changes significantly.
It signals a potential trend change or continuation.
Identifying CHoCH Setups
Look for a sudden change in the character of price action, such as:
A sharp increase or decrease in volatility.
A change in the momentum or pace of the trend.
Entry Strategies
Bullish CHoCH (Upside Continuation or Reversal):
Look for a sudden increase in bullish momentum or volatility.
Consider entering a long position when the price confirms the new bullish character.
Bearish CHoCH (Downside Continuation or Reversal):
Look for a sudden increase in bearish momentum or volatility.
Consider entering a short position when the price confirms the new bearish character.
Exit Strategies
Set a target profit level (e.g., 1-2 times the risk) and exit at least a portion of your position.
Use a stop-loss order to limit potential losses (e.g., below the entry level for long trades, above the entry level for short trades).
Risk Management
Start with small position sizes (e.g., 1-2% of your account per trade).
Use stop-loss orders to protect against false signals or reversals.
Remember, trading involves risk, and it's essential to practice with a paper trading account before risking real capital. Always start small and gradually increase your position sizes as you gain experience and confidence in your trading strategy.
