What if you could spot exactly where institutions enter trades before major market moves? The CHOCH (Change of Character) Entry & Liquidity Model reveals these critical moments by combining:
✔ Market structure shifts (where trends begin/end)
✔ Liquidity analysis (where stops get hunted)
✔ Precision entry triggers (optimal trade execution)
Used by hedge funds and professional traders, this strategy helps you:
✅ Avoid false breakouts
✅ Catch trends early
✅ Trade with institutional flow
In this 2,500-word guide, you’ll discover:
- What makes CHOCH entries so powerful
- How to identify liquidity pools like professionals
- Step-by-step trading rules
- The best tools to implement this strategy
What is a CHOCH Entry in Trading?
A Change of Character (CHOCH) occurs when price:
- Breaks market structure (creates new highs/lows)
- Shifts momentum (shows institutional participation)
- Creates new trend conditions
Key Characteristics of Valid CHOCH Entries:
- Forms after liquidity sweeps
- Confirmed by volume spikes
- Aligns with order blocks/FVGs
The Liquidity Model: How Institutions Trade
Smart money traders target two liquidity types:
1. Buy-Side Liquidity (BSL)
- Above price (stop hunts for shorts)
- Swept before downtrends
2. Sell-Side Liquidity (SSL)
- Below price (stop hunts for longs)
- Swept before uptrends
Pro Tip: Liquidity pools often form at:
• Previous swing highs/lows
• Round numbers (1.3000 in EUR/USD)
• High-volume nodes
Step-by-Step CHOCH & Liquidity Strategy
Phase 1: Identify Liquidity Zones
- Mark previous swing highs/lows
- Identify equal highs/lows (liquidity pools)
- Watch for false breakouts beyond these levels
Phase 2: Wait for CHOCH Formation
- Price must break market structure
- Show momentum shift (strong candle closes)
- Retest the liquidity zone
Phase 3: Execute Trade
- Entry: On retest with confirmation candle
- Stop Loss: Beyond recent swing point
- Take Profit: Next liquidity zone
Best Trading Tools for CHOCH Strategies
| Tool | Best Feature | Price |
|---|---|---|
| TradingView | Manual CHOCH marking | Free/$ |
| MT4/MT5 | Custom CHOCH indicators | Free |
| Bookmap | Real-time liquidity heatmaps | $$$ |
| Volume Profile | Identifies key liquidity zones | $ |
5 Pro Tips for Trading CHOCH Entries
- Only trade during London/NY overlap (8AM-11AM EST)
- Combine with 200 EMA for trend confirmation
- Wait for FVG fills near CHOCH points
- Avoid trading CHOCHs during news events
- Backtest 100+ trades before going live
FAQs About CHOCH Trading
1. What timeframe works best for CHOCH entries?
4H and daily charts provide highest accuracy.
2. How is CHOCH different from BOS (Break of Structure)?
CHOCH shows momentum shift, while BOS just shows structural break.
3. Can I use CHOCH for crypto trading?
Yes, especially in BTC/USD and ETH/USD pairs.
4. What’s the win rate of this strategy?
70-80% when combined with proper liquidity analysis.
5. Do I need special indicators?
No, but volume tools help confirm liquidity sweeps.