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SMC

HOW And WHY The Markets MoveIn this video I explain HOW and WHY the markets move. At it's core, trading is a zero-sum game, meaning that nothing is created. There must always be a counter-party to any trade, after all it is called "trading". Because of this, liquidity is the lifeblood of the market and it is what is required by all participants, albeit more for the larger entities out there. In order for these larger entities to trade, they must do so in stages of buying and selling, and not all in one single position like we do as retail traders. They buy on the way down, and sell on the way up, throughout many different time horizons. Therefore, they require price to be delivered efficiently in order to sustain this working machine. I hope you find the video somewhat insightful. Regardless of your beliefs, I think it can be agreed that these two principles are what drives the marketplace and it's movements. - R2F
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OANDA:WTICOUSDEducation
by Road_2_Funded
7
Two Roads to Profit. A Comparison of ICT/SMC and Advanced VSAHello traders and investors! When we start engaging in trading and investing, we get acquainted with various methods of forecasting price movements. Gradually, if we have enough persistence, strength, and patience, we choose our own path to profitable trades. Among the most popular approaches, we can highlight the use of various oscillators and channels, Dow Theory, Elliott Waves, Fibonacci levels, supply and demand, Volume Spread Analysis (VSA), market auction theory, and the Inner Circle Trader/Smart Money Concept (ICT/SMC). Many traders combine elements from different approaches into their trading system. I personally prefer a concept I call Advanced VSA. It’s a comprehensive set of tools that combines ideas from VSA, Dow Theory, and Supply and Demand analysis. The name "Advanced VSA" perfectly captures the essence of the method, as it is fundamentally based on analyzing volume and price spread. Recently, the ICT/SMC concept has been gaining more and more popularity. Today, I want to explore the similarities and differences between ICT/SMC and Advanced VSA. If there are any inaccuracies in my explanation of ICT/SMC basics, feel free to correct me in the comments. Perhaps after reading this article, you’ll be able to decide which approach resonates more with you and which one you believe will help you in your trading. I hope this will be helpful. Let’s dive in! Basic Differences Before diving into the technical details, let's first clarify the key differences between these concepts. Who Controls Price Movements The ICT/SMC concept assumes that price movements are controlled by large players, such as market makers, who direct prices in the desired direction. This is similar to a model where one "center of power" determines the market's direction. In contrast, Advanced VSA is based on the idea that two forces influence price — the Buyer and the Seller. All analysis revolves around the interaction between these two sides, creating a more balanced model where both forces are equally important. Traded Volume The ICT/SMC concept does not use traded volume as a part of its analysis. In Advanced VSA, volume is an important factor. It is considered an integral part of the data that helps to understand market processes and the actions of participants. Now let’s move on to a detailed comparison of the elements of these concepts. What They Have in Common Both concepts teach traders to identify price ranges on the chart where a large player (Market Maker in ICT/SMC) or a Buyer (in Advanced VSA) shows interest in buying, and ranges where the Market Maker or Seller is interested in selling. When the price returns to these ranges, traders can execute buys or sells. We can call these price ranges contextual areas for buying and selling. Neither concept relies on technical indicators. Instead, they focus on the following key terms for identifying the trade direction and the trade entry point: Trend Trend break/half-trend Trend confirmation Accumulation/Distribution/Sideways movement/Flat Contextual areas for buying and selling The first four terms help determine the direction of the trade, while the fifth helps identify the entry point and the likely target of the trade. Both methods suggest using higher timeframes to find contextual areas and lower timeframes to find entry points within those areas. What Are the Differences The differences between the concepts lie in the interpretation of key terms. For the first four terms (trend, trend break, trend confirmation, accumulation/distribution/Sideways movement), the distinctions are minor and relate mostly to specific interpretations. However, the main differences arise in the rules for identifying contextual areas of interest (buyer, seller, or market maker). Let's look at these differences in more detail. Difference 1: Use of Volume In ICT/SMC, contextual areas of interest are determined solely based on price action and candlestick patterns, without taking traded volume into account. In contrast, Advanced VSA sees volume as an integral part of the analysis. contextual areas of interest are identified by both traded volume and price behavior (candlestick patterns). If there was interest from a buyer, seller in a specific price range, leading to a price change, it's logical to assume that the volume traded in that range should be higher than in previous periods over a similar timeframe. To illustrate the importance of using all available data for analysis, consider an analogy with choosing the best time for a seaside vacation. If the decision is based only on water and air temperature, while ignoring factors like wind or rainfall, the choice may be misguided. For example, choosing April for its comfortable temperature might result in encountering constant rain and high waves. Thus, in Advanced VSA, volume plays a crucial role, whereas it is absent in ICT/SMC. Difference 2: Types of Contextual Areas of Interest In ICT/SMC, the following types of contextual areas of interest are used: order block, breaker, mitigation block, and rejection block. All of these areas are formed by a specific arrangement of candles on the chart. In contrast, Advanced VSA operates with a different set of contextual areas of interest: effort, zone, and range (sideways movement). Effort refers to a single candle or bar that indicates significant market activity. Zone is formed by a sequence of candles or bars, taking into account their traded volumes. Range (sideways movement) is defined by a series of consecutive candles/bars where price fluctuates within a limited range, interacting alternately with the upper and lower boundaries of the range. It's only possible to identify which party (buyer, seller, or market maker) controls the range after the price breaks out and confirms the move. If the volumes align with Advanced VSA's criteria, order blocks and mitigation blocks in ICT/SMC can be considered as zones in Advanced VSA. So, not all order blocks and mitigation blocks will be considered zones in Advanced VSA. The breaker will be discussed separately, and there is no equivalent to the rejection block in Advanced VSA. Difference 3. Price Attraction Points In ICT/SMC, concepts such as fair value gap, liquidity void, and liquidity are used to describe price attraction points. In Advanced VSA, the terms fair value gap and liquidity void are not utilized. Most of the time, these ICT/SMC elements correspond to price interest points in Advanced VSA, such as effort. The term liquidity has the same meaning. Difference 4. Importance of Levels In Advanced VSA, levels play an important role in identifying trade opportunities. To understand the significance of levels, let’s first recall the concepts of trend and range (sideways movement). In both ICT/SMC and Advanced VSA, a trend is broken down into components, often referred to as impulses or expansion moves. A range, on the other hand, is characterized by its boundaries and the vectors of price movement between those boundaries. In Advanced VSA, important trading signals include the defense of a broken level or a price retracement to a level followed by its defense. In Advanced VSA, the defense of a broken level or the cancellation of a breakout (where the price returns back behind the broken level) followed by a defense of that level is considered a signal for identifying trades. This method helps traders spot potential entry points where either buyers or sellers to protect a key price level, giving more confidence in the direction of the market. The most important levels include the base of the last impulse, the boundaries of a range, and the test level of a zone. In ICT/SMC, there are no direct equivalents of these elements when it comes to searching for trades. However, breakers and sometimes mitigation blocks serve similar purposes to the levels in Advanced VSA, but the approaches differ. In ICT/SMC, trades are typically executed within the breaker or mitigation block, whereas in Advanced VSA, trades are found when a level is defended: buy trades above the level (supported by buyers), and sell trades below the level (supported by sellers). Additionally, Advanced VSA allows for trading within ranges, moving from one boundary to the other, as long as the boundaries are defended. Summary Despite the shared terms and similar approaches, there are significant differences between the two concepts: Number of forces influencing price movement: In ICT/SMC, it is believed that price is controlled by a single force, the Market Maker (MM). In contrast, Advanced VSA considers the interaction of two forces—buyers and sellers—as driving price movements. Use of volume in analysis: ICT/SMC does not take traded volume into account during analysis, while in Advanced VSA, volume is a crucial element for identifying market forces and areas of interest. Use of levels for trade entries: In ICT/SMC, levels do not play an important role, whereas in Advanced VSA, levels one of the possible places for identifying potential trade setups. Good luck with your trading and investing!
OANDA:XAUUSDEducation
by AlexeyWolf
2
Smart Money and the why behind it I have used @TradingView for near enough 10 years now. What I like about the platform is the simplicity and the tools. I often get asked about things like strategy or other people's techniques - "What do you think of SMC or this guy or that guy" Look, when it comes to trading - Liquidity is something very little people understand. Gurus talk about it and draw pretty lines but still fail to break it down as to why it's there in the first place. "Ah it's where the big boys buy or sell" so to help visualise this lets use some of these tools here on Tradingview. Look at my first chart here; What I have done is jumped up a timeframe and placed a volume profile tool on my chart, then simply used the drawing tool to draw a squiggle around the relevant nodes. I then dropped back to the smaller timeframe and switched on a couple of indicators to help visualise where the liquidity is. if you look at the lines 15minutes and 30minutes both in green and cast your eyes to the right, can you see they sit just below (as price is coming from above) to those higher volume nodes from that higher timeframe? Let's use another tool here on TradingView; This one is called a fixed range volume profile. the two blue lines extended out are known as the value area high and low. Often this is set to around 70-75% but I like to reduce that a little. The red line is called a PoC or point of control. This basically means the highest transactional point of the range you fixed. However, if you look over to the left this time you will see two higher volume nodes (mountains) and therefore look at the 15m and 30m lines again with fresh eyes. In this next image I have increased the range and dragged it over to include more data. I could write full strategies on this tool alone. The first thing you should notice is the PoC has now jumped up higher. Think logically about this for a second. We are seeking lower timeframe liquidity down low and the area of interest and value is showing price was accepted up high. So, after grabbing liquidity, would we anticipate the price to continue down lower or come back to play in the accepted zone? This is where a lot of newer traders fail, especially when trading smart money concepts "SMC" for short. They fail to understand the bigger picture. Another little tool in the same box-set is the Timeprice indicator. Much like session volume this gives a pretty clean view and of course settings can be adjusted. I like the look on this one, it's very modern. But the real value isn't until you zoom in and zoom in and you see why it's called Time - Price. I'll leave that for another post. But continuing the theme of this post; look at the clusters of the time price indicator and note where the PoC sits on the 15m liquidity level. Then below the 30m liquidity is the lower side of the value area. Are you starting to see a theme? In this last image; I have simply highlighted liquidity to keep my chart clean. You will see candles showing the last buys before the selloff. Then a consolidation under the liquidity - this is basically a Wyckoff structure prior to a mark down move. We then drop into the liquidity pocket and here is where most SMC traders would be jumping long. We see a very nice little rally, then a large fast drop through the liquidity, this hitting many stops and triggering new short positions. which is why as these shorts get triggered, you anticipate the pullback - to what level? Well look left and the charts will tell you. I hope this has opened a few eyes - go away and have a play with these indicators on @TradingView and feel free to aks if you have any questions. Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years' experience in stocks, ETF's, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Education
by Mayfair_Ventures
4
Types of Entry Models in SMC ConceptsIn Smart Money Concepts (SMC) trading, there are different types of entry models that traders use to enter the market. These include aggressive entry, actual entry, and order flow entry models. Here’s a simple explanation of each: 1. Aggressive Entry Model (15m): @Manipulation Entry Criteria: During Liquidity (LQ) Sweeps at Killzones + Stack Entries at Lower Time Frame (LTF, 1m) Description: Traders enter trades during significant liquidity sweeps, particularly in key market zones known as killzones (high-activity periods). They stack their entries by analyzing the 1-minute chart to find optimal entry points. This approach aims to catch early moves by entering immediately after liquidity has been swept, indicating potential reversals or strong market moves. Order Type: Market Order(post candle confirmation) Traders execute a market order as soon as their entry criteria are met on the 1-minute chart, entering the trade immediately at the current market price. Time Frame: 1 minute (LTF) 2. Actual Entry Model (15m): Post Manipulation Entry Criteria: At Valid Supply or Demand or Flip Zones Description: Traders enter trades at well-defined supply and demand zones or flip zones (areas where the market changes from supply to demand or vice versa). They wait for the price to reach these significant zones on the 15-minute chart, providing a more confirmed entry point that aligns with market structure and potential reversals. Order Type: Limit Order Traders place a limit order on the 1-minute chart at a specific price level they believe the market will reach, ensuring a better entry price. Time Frame: 1 minute (LTF) 3. Order Flow Entry Model (15m): @Distribution Entry Criteria: At Unmitigated Order Flow Description: Traders look for areas of unmitigated order flow on the 15-minute chart. Unmitigated order flow refers to price levels where significant orders have not yet been fully absorbed by the market, indicating potential areas of strong buying or selling pressure. Traders place their entries at these levels, often waiting for a candle confirmation to ensure the validity of the order flow analysis. Order Type: Limit Order (post candle confirmation) Traders wait for a candle confirmation on the 1-minute chart before placing a limit order. They analyze the order flow and wait for a confirming candle that aligns with their analysis before setting a limit order to enter the trade. Time Frame: 1 minute (LTF)
Education
by arjTradingofficial
Profitable Multiple Time Frames Smart Money Strategy Revealed In this post, I will share with you a very accurate SMC strategy that combines top-down analysis, liquidity, imbalance, order block and inducement. Step 1 - Identify liquidity zones on a daily Liquidity zones are the areas on a price chart, where big players are placing their orders. From such areas, significant bullish and bearish movements initiate. Liquidity zones that are above the current price will be the supply zones, while the liquidity zones that are below the current price will be the demand zones. We will look for shorting opportunities from supply areas and for buying opportunities from demand zones. Here are the liquidity zones that I identified on EURJPY. Step 2 - Wait for a test of one of the liquidity zones Let the market test the liquidity zone. For buying, the price should reach a lower boundary of a demand zone. For shorting, the price should test an upper boundary of a supply zone. I underlined the exact levels that the price should test on EURJPY. Here is the test of the lower boundary of the demand zone. Step 3 - Look for inducement on an hourly time frame With the inducement, smart money make the market participants think that the liquidity zone that the price is testing doesn't hold anymore. When the price tests a supply area, an hourly candle close above its upper boundary will be a bullish inducement. With that, the smart money incentivize buying orders. When the price tests a demand area, an hourly candle close below its lower boundary will be a bearish inducement. With that, the smart money incentivize selling orders. The price closed below a lower boundary of a demand zone on EURJPY on 1H time frame. Step 4 - Look for imbalance on an hourly time frame After a violation of a supply area on an hourly time frame, look for a bearish imbalance. Bearish imbalance is a strong bearish candle with wide range and big body. With that candle, the market should return within a supply zone and closed within or below that. After a violation of a demand area on an hourly time frame, look for a bullish imbalance. Bullish imbalance is a strong bullish candle with wide range and big body. With that candle, the market should return within a demand zone and closed within or above that. Here is the example of a bullish imbalance on EURJPY. After a bearish inducement, the price formed a high momentum bullish candle and closed within the demand zone. The imbalance signify that a liquidity zone violation was a trap . With that, smart money simply was trying to grab the liquidity. That will be a signal for you to open an order. Step 5 - Look for an order block After the formation of the imbalance, the market becomes locally week and quite often corrects to an order block. Order block will be the closest hourly liquidity zone. After a formation of a bearish imbalance, look for a supply zone on an hourly time frame. That will be your perfect zone to sell. After a formation of a bullish imbalance, look for a demand zone on an hourly. That will be your area to buy from. Here is the order block on EURJPY. Step 6 - Set a limit order Set a sell limit order within a supply area after a formation of bearish imbalance on an hourly time frame. Set a buy limit order within a demand area after a formation of a bullish imbalance on an hourly. Here is your buy entry level on EURJPY. Step 7 - Select the target If you sell, your target should be the closest daily structure support: horizontal or vertical one. If you buy, your target should be the closest daily structure resistance: horizontal or vertical one. In our example, our closest structure resistance if a falling trend line. Step 8 - Set stop loss If you sell, stop loss will lie above a bullish inducement. If you buy, stop loss will lie below a bearish inducement. Here is a perfect point for a stop loss for a long trade on EURJPY. Step 9 - Trade Let the price trigger your entry, and then be prepared to wait. It took many days for EURJPY to reach the target. Trading Tips: 1. Make sure that you have a positive reward/ratio. It should be at least 1.2 2. Risk no more that 1% of your trading account per trade Being applied properly, that strategy shows 70%+ accuracy. Try it by yourself and let me know your results. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
1
HIGH + LOW RESISTANCE LIQUIDITYHIGH + LOW RESISTANCE LIQUIDITY LOW RESISTANCE LQ 1. No liquidity Available SSLQ generated at weak low = low ressistance LQ 2. Price is more likely to pullbakc to the nearest POI 3. High resistance LQ left at new strong high 4. Price will move impulsively past low resistance lows to target availabe weak low HIGH RESISTANCE LQ 1. Strong liquidity Signals potential institutional backing leaves high resistanve LQ 2. Often price will then pull bakc much deeper or protentially reverse 3. The end of the pullback often forms through a liquiditytion, leaving high resistance LQ at what he becomes the new strong / protected high 4. Price meets some resistance at the sweep zone to the left rather than smashigh straight through the weak lows when there's low resistance lQ
OANDA:XAUUSDEducation
by quangcttn
Learn What is Inducement and Trap in Smart Money Concepts SMC Smart Money Concepts can be applied for the identification of trend reversal in Forex and Gold trading. In this article, we will discuss what is an inducement and a trap in SMC . And how to apply them to spot an accurate trading signal. We will study the important theory and go through real market examples on XAUUSD chart. Imagine that there is a strong historical resistance on a price chart. Because the price reacted to that strongly in the past, many sellers will place selling orders on that in future, anticipating a similar reaction. Placing short trades, their stop losses will lie above the resistance. In case of a bullish violation of the underlined resistance, sellers will be stopped out from their short trades and close their positions in loss . After the violation of a resistance, according to the rules, it should turn into support . Many traders will place their buy orders there, anticipating a bullish continuation. Bearish violation of such a support will stop out the buyers as well. Such a price action will be called an inducement and a bullish trap. With that, smart money grab the liquidity both from the buyers and from the sellers. After that, with a high probability, the market will drop . For example, Bullish violation of an all-time-high on Gold can easily be a bullish trap. To confirm that, the price should simply break and close below a broken horizontal resistance. That will confirm a local bearish reversal. With a bullish trap and inducement, smart money are quietly placing HUGE SELLING ORDERS , making the retail traders close short trades in loss (buy their positions) and buy from the broken structure, providing them the liquidity. The ability to recognize the traps will let you understand real intentions of smart money and trade with them. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
2
Best Technical Indicator to Identify Liquidity Zones Liquidity zones are the essential element of Smart Money trading . These zones provide the safest and the most accurate trading opportunities. The problem is, however, that it is quite complicated for the newbie traders to identify these zones properly. But there is ONE technical indicator that can help. In this article, I will show you the best technical indicator for the identification of liquidity zones. This technical indicator is called Volume profile. Adding that on your chart, you should look for low volume and high volume nodes. High volume nodes indicate the price levels on the chart where big volumes were traded and a high activity of the market participants occurred. The indicator plots 3 significant volume spikes. These are 3 high volume nodes. After you identified high volume nodes, you should analyse a price action and recognize related historical structures. By related structures, I mean historical levels that were respected by the market and from where significant price movements initiated. When you underlined these structures, you should consider the wicks and candle closes. Low volume nodes indicate the price levels on the chart where it has been relatively little trading activity and limited participation from market participants. These zones indicate a lack of liquidity , which can impact the ease of price movement in those areas. Here are 2 low volume nodes that I spotted. After you spotted low volume nodes, you should analyse a price action and recognize related historical structures. Here are the liquidity zones that are based on low volume nodes. Again, these areas are based on wicks and candle closes. These 5 area will be the important liquidity zones from where Smart Money trader can look for trading opportunities. Learn to recognize liquidity zones properly and improve your trading. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
4
Trade Like a Sniper - Episode 4 - XAGUSD - (10th May 2024)This video is part of a video series where I backtest a specific asset using the TradingView Replay function, and perform a top-down analysis in order to frame ONE high-probability setup. I choose a random point of time to replay, and begin to work my way down the timeframes. Trading like a sniper is not about entries with no drawdown. It is about careful planning, discipline, and taking your shot at the right time in the best of conditions. A couple of things to note: - I cannot see news events. - I cannot change timeframes without affecting my bias due to higher-timeframe candles revealing its entire range. - I cannot go to a very low timeframe due to the limit in amount of replayed candlesticks In this session I will be analyzing XAGUSD, starting from the Monthly chart. - R2F
FOREXCOM:XAGUSDEducation
by Road_2_Funded
What is FLAT in the markets, practical tips☝️Do not act based on my analysis, do your own research!! The main purpose of my resources is free, actionable education for anyone who wants to learn trading and improve mental and technical trading skills. Learn from hundreds of videos and the real story of a particular trader, with all the mistakes and pain on the way to consistency. I'm always glad to discuss and answer questions. 🙌 ☝️ALL videos here are for sharing my experience purposes only, not financial advice, NOT A SIGNAL. YOUR TRADES ARE YOUR COMPLETE RESPONSIBILITY. Everything here should be treated as a simulated, educational environment. Important disclaimer - this idea is just a possibility and my extremely subjective opinion. Do not act based on my analysis, do your own research!!
Education
by Yelli_trades
Smart Money Concepts Detailed Learning Plan. 5 Essential Topics If you want to learn Smart Money concepts, but you don't know what to start with, this article with help. I will share with you 5-steps Smart Money Concepts learning plan . 5 important topics to study in SMC. Topic 1: Market Structure - the analysis of a behavior of a price on a chart. In the contest of Smart Money Concepts you should learn: -SMC structure mapping -Market trend identification -Trend change -Trend reversal -SMC important events: BoS, CHoCH Learn Trend Analysis Leach ChoCH Topic 2: Liquidity Zones - learn to identify the areas on a price chart where liquidity concentrates. Learn How to Identify Liquidity Zones Topic 3: Imbalance - one of the most accurate signals of the presence of big players / smart money on the market. Learn How to Identify Imbalance with Candlestick Topic 4: Order Block - the specific areas on a price chart where institutional traders / smart money are placing significant number of trading orders. Top 5: Top-Down Analysis - structured and consistent analysis of multiple time frames. After you study Topic 1, 2, 3, 4, you should learn to apply these knowledge and techniques on multiple time frames, to make informed decisions, following long-term, mid-term, short-term analysis. Learn Top - Down Analysis The 5 topics that we discussed are essential for your success as a smart money trader. Study these topics with care, and I guarantee you that you will achieve exceptional results. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
4