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SMC

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
Smart Money Concept: A Focus on Liquidity and Trade ExecutionSmart Money Concepts (SMC) empower traders to understand the invisible hand of institutional players ("smart money") in markets. By analyzing liquidity, the lifeblood of price movements, SMC equips you to anticipate potential breakouts and identify high-probability entry points. Let's dive into key concepts: Liquidity Types: ● ERL (External Range Liquidity) : Areas of past significant price swings (highs and lows), attracting orders and potentially acting as support/resistance. Look at Previous Day/Week/Month H/Ls and Previous Trading Sessions H/Ls (Aisa, London, & NY) ● IRL (Internal Range Liquidity) : Areas within the current trading range where the price paused or reversed, indicating potential order clusters, like FVGs. Price moves from one Liquidity Zone (ERL) to the other (IRL) & vice versa! Price Zones: ● Premium/Discount Array : Based on the recent price leg, calculate the 50% midpoint (fair value) and extend 50% above and below to create a high-probability trading zone in regards to where the price should be going next, for example, if the price is in the lower part of the recent leg, then we should expect a move back into the Premium Array. Highs & Lows: ● LTH/LTL (Long Term High/Low) : Turning points over longer timeframes, often acting as strong magnets for price. ● ITH/ITL (Intermediary Term High/Low): Significant swing points, usually highest / lowest point when the price reaches an imbalance zone. ● STH/STL (Short Term High/Low): Recent swing points within the current trading range, acting as potential pivots, you will find those on both sides of the ITL/L. Identifying Imbalances: ● Gaps: Unfilled price spaces suggest imbalanced supply/demand, potentially leading to price retracements to fill the gap. ● FVG (Fair Value Gaps): Areas where price gapped through support/resistance, leaving an "unfair" imbalance, attracting corrective moves to rebalance price. Trade Execution: ● OTE (Optimal Trade Entry): Look for confluences of various SMC elements (liquidity zones, imbalances, price patterns) for high-probability entry points that match the 61.8 / 70 Fibonacci levels. ● Kill Zones: Increased volatility during major market openings (London, New York) can offer high-risk, high-reward opportunities. This is when you should be trading! Remember: ● SMC is a complex framework, master each element before combining them for strategic analysis. ● Backtest and paper trade your SMC strategies to build confidence before risking real capital. ● Market dynamics are fluid, adapt your analysis and trade execution based on evolving price action. By understanding these SMC concepts and their interplay with liquidity, you'll gain a good understanding of market movements and improve your trade execution. Remember, practice, patience, and disciplined risk management are crucial for success in any trading strategy.
OANDA:XAUUSDEducation
by financialflagship
Understanding LIQUIDITYIn this video I try to explain liquidity as it pertains to training in a simple manner. Liquidity are basically orders in the marketplace. Since trading is a zero-sum game, without liquidity, there is no trading. Simply put, If you wanted to BUY, then you would need someone to SELL to you, and vice versa. Smart Money has deep pockets and needs a large amount of liquidity to facilitate their positions. They want to be able to get in and our of their trades, as well as to be able to trade with capital that would be worth the reward. The largest pools of liquidity usually reside above swing highs and lows, and equal highs and lows (double/triple tops and bottoms). Support and Resistance ideologies dominate the market, and besides that, psychologically it makes sense to put stoplosses at such areas rather than at some random area within a range. There are also breakout traders who see price breaking out of an area as a sign of strength (or weakness if bearish) and they set their entries above/below these levels. This is how liquidity is "engineered" in the market and sentiment manipulated. These pools of liquidity can be seen as a magnet, drawing price to these levels, either to grab liquidity before reversing or continuing in its current direction. - R2F
OANDA:XAUUSDEducation
by Road_2_Funded
14
SMC The best way to detect Order Blocks Due to the great popularity of the Smart Money Concept approach, traders around the world are learning how to identify Order Block in the best way possible. Although there are different variations of the approach, the logic remains the same - accurately identifying a large limit volume in order to get the best entry point and catch the movement of a major player. I will show you, in my opinion, the most accurate practice for detecting Order Block, which in addition will increase the number of potential entries. It is different from the classic application. Check it out! Defining Max and Min on the chart No matter what asset you are trading and timeframe, any logic for finding OB starts with marking the lows and highs (MIN MAX). This is necessary to: Identifying the trend in whose direction we will be looking for the Order Block. Directly for the Order Block itself, as it will be located at one of the MIN or MAX. In our example, we will be looking for an Order Block on USDJPY H1 Note: There are so-called true Min and Max (signed in white on the chart). They determine the direction of the trend on this timeframe and the Order Block can be located in them. But there are also local Min and Max (signed in orange color), which do NOT determine the direction of the trend on this timeframe, but they can also contain an Order Block. Having determined the true Min and Max, it is not difficult to establish the trend direction by comparing the last 4 points of the true MIN MAX. In our case, the trend is downward. Looking for a Order Block by trend OB should be searched at the last MAX (in case of selling) or MIN (in case of buying). It does not matter whether it is a local or a true MIN MAX, the most important thing is the most recent one. And here are the specific rules for this (for a bearish OB): Find the most recent MAX Find the last green candle before the MAX MAX point should be a false breakout of this green candle Draw the boundaries of this green candle - they will be the order block Let's turn to a close-up of our example: All conditions are met. Found order block for sale. Oder Block activation and entry. Once an Order Block is marked, it is not yet sufficient to find an entry. An important condition before entry is Activation of the block. This is how we make sure that a major player is really moving the price in the right direction. Activation is the breakdown of the block in the direction of the trade. In our example, activation is a break of the lower boundary of the block. Attention: if the block order breaks through in the opposite direction, it is considered broken and can no longer be used. After activation, you should wait for the price to return to the block and open a trade there. It is ideal to put a limit order. Stop Loss will always be the upper boundary of the block, Take Profit can be taken variably, there are no rigid rules. Strong blocks can give more than one reaction. Then you can try to enter the block again. Conclusion In this article, we have shown the author's variant of how to find a block order on the trend and showed an example of how to work it out. Such blocks are especially strong and give many good entries. Of course, finding a block order is an important part of the Smart Money concept, but there are many more tools that will help to clarify the entry and exit and make SMC as efficient as possible (e.g. liquidity). We will talk about them in other articles.
Education
by Smart_Miner
3
How to trade Smart Money Concepts (SMC)This trading strategy was initially popularized by an infamous trader who is also the founder of the Inner Circle Trading (ICT) method which is claimed to be the evolved version of the SMC. Let’s first take a look at the building blocks of this trading strategy and compare it with the well-known trading concepts by industrial titans (Dow, Wyckoff, Elliott). Essentially, SMC puts forth the notion that market makers, including institutions like banks and hedge funds, play a deliberate role in complicating trading endeavours for retail traders. Under the Smart Money Concepts framework, retail traders are advised to construct their strategies around the activities of the "smart money," denoting the capital controlled by these market makers. The core concept involves replicating the trading behaviour of these influential entities, with a specific focus on variables such as supply, demand dynamics, and the structural aspects of the market. Therefore, as an SMC trader, you'll meticulously examine these elements when making trading decisions, aligning your approach with the sophisticated techniques of prominent market figures. By embracing this perspective and closely monitoring the actions of market makers, SMC traders endeavour to establish an advantageous position in their trading activities, aiming to capitalise on market movements driven by smart money. When you initially dive into the Smart Money Concepts (SMC), the technical vocabulary can be a bit overwhelming. To help demystify it, here's an overview of some common terms used by SMC traders. 1. Order Blocks These are used to discuss supply and demand. Some SMC traders consider order blocks as a more refined concept than standard supply and demand, although not everyone agrees on this. An order block signifies a concentrated area of limit orders awaiting execution, identified on a chart by analysing past price movements for significant shifts. These zones serve as pivotal points in price action trading, influencing the market's future direction. When a multitude of buy or sell orders cluster at a specific price level, it establishes a robust support or resistance, capable of absorbing pressure and triggering price reversals or consolidation. 2.Fair Value Gap You should clarify whether your current trading style suits you. If you don't have time to look at charts during the day, you should not focus your strategy on intraday trading using 1 5-minute or 30-minute charts. It is definitely better to develop an approach that works on a 4-hour or daily chart so that you have enough time to analyze the charts before or after work. Ideal time and timeframe This phrase describes an imbalance in the market. It occurs when the price departs from a specific level with limited trading activity, resulting in one-directional price movement. In the case of a bearish trend, the Fair Value Gap represents the price range between the low of the previous candle and the high of the following candle. This area reveals a discrepancy in the market, which may indicate a potential trading opportunity. The same principle applies to a bullish trend but with the opposite conditions. 3.Liquidity Liquidity plays a pivotal role in SMC. It pertains to price levels where orders accumulate, rendering an asset class "liquid." Essentially, these are price points with available orders ready for transactions. Liquidity can manifest in various forms, such as highs and lows or trend line liquidity. How liquidity is handled varies depending on the trader. One of the most common approaches is to use a pivot high or pivot low. For better understanding, a pivot high or low is formed when several adjacent candlesticks have a higher low or lower high. In the picture, we can see the pivot low. The candlestick has the lowest low compared to its three neighbours to the right and left. 4.Break of Structure (BOS) Once you become familiar with this terminology, you'll realize that many SMC concepts are consistent with traditional trading ideas. A fundamental element of SMC market analysis is the emphasis on the "break of structure" (BOS) in the market. 5.Change of Character (ChoCH) For instance, in a chart illustrating breaks of structure, each time the price surpasses the previous high, a break of structure occurs. Conversely, when the price drops below previously established lows, it signals a change of character (ChoCH). SMC traders leverage their understanding of these patterns to make informed decisions based on the market's behaviour.
Education
by Golden_Star1994
2