What observation adds evidence after the first break below 106?
Reveal the worked answer
The failed reclaim of 106.
It is a separate test, not a repetition of the first label.
Technical Analysis · TA-06 · Core
Change of character
What behavior has stopped working?
What you will learn and prerequisites
- Explain the mechanism in the lesson question.
- Reproduce the worked comparison and recognize its failure case.
Read first: Market structure comes first
Change of character is practitioner shorthand, not one exchange-standard algorithm. Explain the changed behavior rather than treating CHoCH as a command. A meaningful higher-low break followed by failed reclaim is more informative than the acronym alone.
Understand the mechanism
Choose whether your rule uses closes or intrabar extremes and which swing counts as meaningful. A rising market can stop buying dips; a falling one can accept above a prior lower high. The first break may still be a temporary excursion.
Walk through the process
Identify three stages: prior behavior, breaking event and next test. Do not silently promote an execution-timeframe break into a higher-timeframe reversal. Transition can be ambiguous, and waiting for clearer structure is legitimate.
Pause before deciding
Describe what the example actually establishes and what remains unknown. A technical observation supplies context, not an automatic options entry. Contract cost, horizon, liquidity and the consequence of failure still need to match the thesis. Record the contrary branch so a named pattern cannot become an excuse to ignore new evidence.
A worked example
In 100→105→103→108→106→110, dips hold higher lows. Price then closes 105, rallies to 106 and closes 104.50. The failed reclaim adds evidence beyond the initial break. Reclaiming and holding 108 would weaken that transition thesis.
Change of character—worked comparison
Vertical: Spot (USD)
Horizontal: Completed observation
1. Fictional example
Read the graph as a data table
| Completed observation | Fictional example |
|---|---|
| 1 | 100 |
| 2 | 105 |
| 3 | 103 |
| 4 | 108 |
| 5 | 106 |
| 6 | 110 |
| 7 | 105 |
| 8 | 106 |
| 9 | 104.5 |
What would invalidate the reading?
Different pivot rules can produce different CHoCH labels. Comparing the labels without matching definitions creates false agreement.
Check your understanding
Try the question before revealing its answer. These are reading checks, not trading certification or a site completion record.
What is the critical failure to avoid?
Reveal the worked answer
Different pivot rules can produce different CHoCH labels. Comparing the labels without matching definitions creates false agreement.
Explain this risk before treating the example as a decision rule. A correct calculation does not guarantee a favorable market outcome.
Return to the question: What behavior has stopped working? State the observed facts, the assumptions and the failure condition separately.
Sources, assumptions and downloadable script
External references support definitions and conventions. Worked scenarios and prose are original. No current quotes or dealer inventory are claimed.
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