Change Of Character (CHoCH) Strategy

Here's a trading strategy cheat sheet for fluid trades traders using the Change of Character (CHoCH) approach:

Change of Character (CHoCH) Trading Strategy Cheat Sheet

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.