🔍 What is SMT Divergence?

SMT Divergence occurs when two correlated instruments (e.g., EUR/USD and GBP/USD, or Nasdaq and S&P500) show a discrepancy in price action — such as one making a higher high while the other fails to do so (or makes a lower high).

This suggests that smart money is manipulating one market while the real intention is visible in the other. It’s a clue that a reversal or shift in direction may be imminent.

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✅ Correlated Pairs Commonly Used:

• EUR/USD and GBP/USD

• S&P 500 (ES) and Nasdaq (NQ)

• Gold and Silver

• Bitcoin and Ethereum

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📌 How to Trade SMT Divergence

🧭 Step-by-Step Strategy

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1. Identify Correlated Instruments

Pick two assets that usually move in the same direction, like:

• EUR/USD vs GBP/USD

• S&P 500 vs Nasdaq

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2. Zoom into a Key Session

Use SMT primarily during high-volume sessions:

• London Open

• New York Open

Use 15m, 5m or 1m charts for precision.

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3. Spot the Divergence

Look for:

• One instrument making a higher high (or lower low)

• The other failing to do the same (or doing the opposite)

✅ Example:

• EUR/USD makes a Higher High

• GBP/USD fails to break its previous high (or makes a lower high)

This can signal a sell opportunity, because the HH on EUR/USD may be a liquidity grab.

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4. Look for Entry Confirmation

Use Smart Money Concepts:

• Break of Structure (BoS)

• Change of Character (ChoCH)

• Fair Value Gap (FVG)

• Order Blocks

Wait for confirmation before entry.