Recently, while analyzing some trading charts, I found that many people do not have a deep enough understanding of market structure. Especially regarding trend reversals, many traders are using a pattern called CHoCh, which is short for change of character trading. To be honest, this concept seems complicated, but once you understand the underlying logic, you can spot many high-probability opportunities in the market.

Let me first explain what exactly change of character is. Simply put, it occurs when the price breaks through previous highs or lows, indicating a trend reversal. If you've seen the Quasimodo pattern, its core logic is quite similar, just with a different name. But what I want to emphasize is that true trading advantage comes from combining change of character trading with supply and demand zones.

To identify this pattern on a chart, you need to follow certain steps: first, identify the current main trend, which can be judged by higher lows or lower highs. Then see if the price breaks the structure, meaning in a bear market, it breaks lower lows, or in a bull market, it breaks higher highs. This step is called BOS (Break of Structure). Next, the price will move in the opposite direction, breaking the recent high or low. At this point, the trend begins to reverse, which is the change of character.

I'll use an actual example of BTC/USDT to illustrate. When you see a series of higher highs and higher lows forming, it indicates the market is in a bullish phase, with buyers in control. But when the last high is broken, and the price starts forming lower lows and lower highs, the trend has reversed. This transition from a bull to a bear market is the real-world manifestation of change of character.

Now I want to share a practical trading strategy. When the change of character pattern is confirmed, I mark supply and demand zones on the recent wave. Then wait for the price to return to this zone, and open a position in the direction of the trend reversal. Set the stop loss a few points above the supply/demand zone—below if it's a demand zone. As for taking profit, I usually manually close when a reverse change of character pattern forms.

The reason this strategy works well is that when the major trend reverses, you can gain significant profits. I started with supply and demand trading, and combined it with the change of character pattern, which has a very high success rate. However, I must remind you to backtest this strategy, because in ranging markets, the reliability of trading signals decreases. Finding good market conditions is crucial so that you can truly leverage the power of this pattern.