The foundation of any SMC strategy is a deep understanding of market structure. This identifies whether the market is in a trend or a potential reversal phase.
The last bullish candle before a significant move downward.
Institutions often return price to these blocks to "mitigate" or close out remaining portions of their orders. This return to the OB provides high-probability entry points for retail SMC traders. 4. Fair Value Gaps (FVG) and Imbalances pdf smart money concept top
is a sophisticated trading methodology that focuses on identifying and following the footprints of institutional investors—such as central banks and hedge funds—on price charts. Rather than relying on traditional lagging indicators, SMC traders analyze liquidity , market structure , and order flow to anticipate major market moves.
are specific price levels where institutional traders have previously placed large buy or sell orders, causing significant price movement. The foundation of any SMC strategy is a
To effectively trade using these concepts, professionals often follow a structured entry model: Beginner's Guide to Smart Money Concepts | PDF - Scribd
A sudden price spike that takes out these stop-losses before reversing and moving in the intended direction. SMC traders wait for these "grabs" to occur before entering trades. 3. Order Blocks (OB) and Points of Interest (POI) Institutions often return price to these blocks to
This is the first signal of a potential trend reversal. It happens when price fails to make a new high/low and instead breaks the opposite structure, indicating a shift in institutional sentiment. 2. Identifying Liquidity & Liquidity Grabs