The first break of structure against the prevailing trend — an early warning the trend may be turning.
In an uptrend of higher highs and higher lows, a CHoCH is the first time price breaks below a higher low; in a downtrend, the first break above a lower high. It is the opposite of a trend-confirming break of structure.
A CHoCH signals that the trend's rhythm has broken and momentum may be shifting, often used as the first clue to look for a reversal setup.
Track the sequence of swing highs and lows. The moment price closes through the last counter-trend swing point rather than making a new trend extreme, that is the change of character.
A single CHoCH can be a fake-out, especially on low timeframes. Confirm with a follow-through break of structure in the new direction before trusting the reversal.
Reading a definition is step one. Chart Bound drills you on spotting Change of Character (CHoCH) and dozens of other setups on live candles, and the Daily gives you one fresh chart to read every day. Free to start.