Change of Character (CHoCH)

Change of Character (CHoCH) is a Smart Money Concepts (SMC) term that signals a potential shift in the prevailing market trend. In an uptrend, a CHoCH occurs when price breaks below the most recent swing low for the first time—indicating that sellers may be gaining control and the bullish structure is being challenged. In a downtrend, a CHoCH occurs when price breaks above the most recent swing high, suggesting a possible reversal to bullish momentum. A CHoCH is considered a weaker, early warning signal of trend change, as opposed to a confirmed trend reversal which requires multiple structural shifts. Traders use CHoCH identification as an alert to reassess directional bias and prepare for potential position adjustments.