Types of CHOCH

There are 3 types of CHOCH:

1. Internal to Internal

2. External to External

3. External to Internal

Internal to Internal CHOCH

What is this about: This explains how to find an Internal to Internal CHOCH and look for an entry.

Explanation

(This is explained in case of a bearish CHOCH) Here, we can see that price was in a previous up trend. Then it got rejected from both zone extremes and reversed to the downside.

The CHOCH happened when price rejected off of those price extremes and broke the range’s low & the rejection off of the Discount zone.

You can look for a sell when price pulls back into the range. Use other entry confirmations for a sell.

Chart example

We’re going to take a look at a bullish reversal. Here, we can see that the previous trend was a downtrend and price formed a range.We can also see that price rejected off of both the Premium & Discount zone. (Although it’s clear in this example that the Discount zone wasn’t reached, let’s assume for the sake of explanation that it was)

Now that price rejected from both extremes, we can check if it broke upwards and that’s exactly what it did. It broke the range’s high and the highest high which was in the Premium zone.

Now, to look for a buy, wait for price to come back into the range (which it did).

The Why behind Internal to Internal CHOCH

What is this about: the Why and How behind the Internal to Internal CHOCH.(This is explained in case of a bearish CHOCH)Let’s imagine we are in a bull trend now. We can say that institutions are buying at this point because it’s easier for them to buy at a discounted price and then push price up.

Now, here we see that when price went up, it didn’t break structure to the upside like it did before.

Instead, it went down. That is because there were more sell orders than there were buy orders. Institutions sold and that made price go down.

Apply the opposite of this logic to understand bullish CHOCHs (when price reverses up).

External to External CHOCH

What is this about: External to External CHOCH and the entry triggers which can be used.There are 2 types of External to External CHOCH. We’re first going to cover the one which has the highest probability of a reversal and this one will mostly be found on high timeframes (like 4H or Daily).

(This is explained in case of a bearish CHOCH)

Here we see a bullish trend on the left side of the chart.

Then we see that price broke to the downside (instead of rejecting off of the Discount zone like it did before). Then after that, it breaks to the upside (instead of rejecting off of the Premium zone like it did before).

Finally, it breaks below the low of the initial range and the new low.

This is when a bearish CHOCH happens.

You can look for a sell when price pulls back above the low it made or the initial range’s low (the latter is more preferable).

An entry trigger he briefly talked about: enter when price goes above the Discount zone or reaches the fair price area.

(This is explained in case of a bullish CHOCH)

Here we see a bearish trend on the left side of the chart.

Then we see that price broke to the upside (instead of rejecting off of the Premium zone like it did before). Then after that, it breaks to the downside (instead of rejecting off of the Discount zone like it did before).

Finally, it breaks above the high of the initial range and the new high.

This is when a bullish CHOCH happens.

You can look for a buy when price pulls back below the high it made or the initial range’s high (the latter is more preferable).

An entry trigger he briefly talked about: enter when price goes below the Premium zone or reaches the fair price area.

For entries, the ETM guy gave these entry triggers to look for (he mentioned them briefly and didn’t explain them much) : scalper methods, use the macro timeframe with a higher stoploss, a hidden order block and a gap (happens in the initial range)

The 2nd type of External to External CHOCH has a liquidity inducement first before it reverses to the opposite direction. I didn’t completely understand this type so I will not explain this further. The 2nd type had a lower probability of a reversal than the 1st type mentioned above.

This is currently the highest quality of CHOCH. It’s a fake out on both sides (it takes out both buyers and sellers).

External to Internal CHOCH

What is this about: External to Internal CHOCH and taking entries.(This is explained in case of a bullish CHOCH)Here, we see a downtrend to the left of the chart. Then we see that price broke structure to the upside. This is when CHOCH happens. To confirm this CHOCH, wait for price to come back down (when price comes back down, it might go to an Order Block) and break that high.

(This is explained in case of a bearish CHOCH)

Here, we see an uptrend to the left of the chart. Then we see that price broke structure to the downside. This is when CHOCH happens. To confirm this CHOCH, wait for price to come back up (when price comes back up, it might go to an Order Block) and break that low.

Entries

Note: The video only covered the entry part briefly and didn’t go in depth.For a sell: Wait for price to pull back inside the initial range and look for a setup when that happens. You could also wait for a stop hunt (that’s when price goes above the latest high).

For a buy: Wait for price to pull back inside the initial range and look for a setup when that happens. You could also wait for a stop hunt (that’s when price goes below the latest low).

Chart example

This is a bullish CHOCH.

Conclusion

Market conditions change sometimes. So, to adapt to its changing structure, look to the left of the chart and check which of these CHOCHs are happening more often. Then use that for your entry.