Smart Money Concept
Smart money = big players who
actually move the market.
Retail traders = small traders who usually get trapped.
Core Idea of Smart Money Concept
SMC teaches you to analyze the
market the way big player’s trade, so you can trade with them, not against
them.
Key Elements in Smart Money Concept:
Market Structure:
The overall direction of price (higher highs/higher
lows = uptrend, lower highs/lower lows = downtrend).
Liquidity:
Retail traders put stop-loss orders in obvious places
(like above resistance or below support).
Smart money hunts these stop-losses to take liquidity
before moving the real direction.
Order Blocks:
The last strong bullish or bearish candle before a big
market move.
Banks and institutions place big orders here, so price
often comes back to these zones.
Supply and Demand Zones
Supply = area where sellers are strong (price falls
from here).
Demand = area where buyers are strong (price rises
from here).
Break of Structure (BOS)
When price breaks previous highs or lows, showing
trend continuation.
Change of Character (CHoCH)
First sign that the trend might reverse.
Why Traders Use SMC?
It helps avoid retail traps (like fake breakouts).
Provides high Risk-to-Reward setups.
Focuses on how the market really works, not just
indicators.