SMC in the trading world means Smart Money Concept, which is a modern technical analysis method used to understand market movements based on the actions of major players (such as banks and financial institutions).
What is SMC in brief?
SMC is based on the idea that the market moves due to "smart money" — that is, large traders who have the ability to move prices. Instead of using traditional indicators, SMC traders focus on analyzing market structure, supply and demand zones, and liquidity to determine entry and exit points for institutions.
Key Elements of SMC:
Break of Structure: When the price breaks a significant high or low, it is considered a signal of a trend change.
Liquidity Grab: Institutions tend to hunt for liquidity above/below highs and lows before changing direction.
Order Blocks: These are areas from which strong movements begin, and they often indicate institutional orders.
Why do traders use it?
Because it gives them deeper insight into the true intent of the market and helps them avoid trading in areas that may be traps set by institutions.
