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Advanced SMC Guide

The Advanced SMC Guide provides insights into professional trading techniques, focusing on concepts such as market structure, liquidity, inducement, order blocks, and risk management. It emphasizes the importance of understanding market dynamics and psychological discipline for successful trading. Key strategies include liquidity sweeps, premium-discount arrays, and the significance of timing during high volatility sessions.

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10 views3 pages

Advanced SMC Guide

The Advanced SMC Guide provides insights into professional trading techniques, focusing on concepts such as market structure, liquidity, inducement, order blocks, and risk management. It emphasizes the importance of understanding market dynamics and psychological discipline for successful trading. Key strategies include liquidity sweeps, premium-discount arrays, and the significance of timing during high volatility sessions.

Uploaded by

botmoneyuk
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Advanced SMC (Smart Money Concept) Guide

This guide covers advanced Smart Money Concept (SMC) topics used by professional traders including liquidity
engineering, inducement, market structure, order blocks, mitigation, fair value gaps, premium-discount arrays, and
execution models.

1. Advanced Market Structure

Market structure is the foundation of SMC.

BOS (Break of Structure) confirms continuation.


CHOCH (Change of Character) signals possible reversal.

Strong BOS happens with displacement candles and imbalance.


Weak BOS usually lacks momentum and may fail.

2. Liquidity Concepts

Liquidity is where stop losses exist.

External Liquidity: Highs & lows outside range.


Internal Liquidity: Equal highs/lows inside range.

Market often sweeps liquidity before moving in the intended direction.

3. Inducement

Inducement is a trap created to attract retail traders.

Example:
Market creates a fake breakout or fake support/resistance before reversing.

4. Order Blocks (OB)

Order Blocks are institutional footprints.

Bullish OB: Last bearish candle before impulsive bullish move.


Bearish OB: Last bullish candle before impulsive bearish move.

High probability OB should have:


- Liquidity sweep
- Displacement
- FVG creation
5. Mitigation Block

A mitigation block forms when institutions revisit previous positions to fill remaining orders before continuing trend.

6. Fair Value Gap (FVG)

FVG represents imbalance between buyers and sellers.

Price frequently returns to rebalance the inefficiency.


FVG combined with OB gives stronger confirmation.

7. Premium & Discount Arrays

Use Fibonacci to identify premium and discount zones.

Above 50% = Premium (better for sells)


Below 50% = Discount (better for buys)

8. Liquidity Sweep Strategy

Buy Setup:
1. Sell-side liquidity sweep
2. Bullish CHOCH
3. Bullish OB/FVG retest
4. Entry confirmation

Sell Setup:
1. Buy-side liquidity sweep
2. Bearish CHOCH
3. Bearish OB/FVG retest

9. SMT Divergence

SMT divergence compares correlated pairs.

Example:
EURUSD makes higher high while GBPUSD fails to do so.
This may indicate reversal.

10. Time & Session Concepts


Best sessions for SMC:
- London Open
- New York Open

Kill Zones:
High volatility institutional trading hours.

11. Risk Management

Never risk more than 1-2% per trade.


Use proper position sizing.
Minimum RR should be 1:2 or better.
Avoid revenge trading.

12. Psychology

Consistency matters more than strategy.


Follow discipline, patience, and emotional control.

13. Common Advanced Mistakes

- Trading every OB blindly


- Ignoring higher timeframe bias
- Entering without displacement
- Trading during major news events
- Over leveraging accounts

Advanced SMC Glossary

Term Meaning

BOS Break of Structure


CHOCH Change of Character
OB Order Block
FVG Fair Value Gap
SMT Smart Money Technique Divergence
Liquidity Sweep Stop hunt before move
Displacement Strong institutional move

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