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SMC Complete Notes

Smart Money Concepts (SMC) is a trading strategy that emphasizes understanding institutional price movements through market structure, liquidity, and order flow. Key components include identifying market trends, recognizing breaks of structure, and utilizing order blocks and fair value gaps for trade entries. Effective risk management and disciplined trading psychology are essential for long-term success in trading.

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33 views2 pages

SMC Complete Notes

Smart Money Concepts (SMC) is a trading strategy that emphasizes understanding institutional price movements through market structure, liquidity, and order flow. Key components include identifying market trends, recognizing breaks of structure, and utilizing order blocks and fair value gaps for trade entries. Effective risk management and disciplined trading psychology are essential for long-term success in trading.

Uploaded by

fortunechigozie784
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Smart Money Concepts (SMC) - Complete Clean

Notes

SMC (Smart Money Concepts) is a trading approach that focuses on how institutions move price. It
teaches traders to follow liquidity, structure, and order flow instead of indicators.

1. Market Structure
Market structure is the foundation of SMC.
- Uptrend: Higher Highs (HH) and Higher Lows (HL)
- Downtrend: Lower Highs (LH) and Lower Lows (LL)
Structure helps identify direction of the market.

2. Break of Structure (BOS) & CHoCH


BOS (Break of Structure): Continuation of trend when price breaks previous high/low.
CHoCH (Change of Character): First sign of trend reversal.
- BOS = continuation
- CHoCH = reversal signal

3. Liquidity
Liquidity refers to areas where stop losses are placed.
- Buy-side liquidity: above highs
- Sell-side liquidity: below lows
Price often moves to grab liquidity before reversing.

4. Order Blocks
Order blocks are areas where institutions placed large orders.
- Bullish OB: last bearish candle before upward move
- Bearish OB: last bullish candle before downward move
They act as strong support/resistance zones.

5. Fair Value Gaps (FVG)


FVG is a price imbalance created when market moves too fast.
Price often returns to fill this gap before continuing trend.

6. Simple SMC Entry Model


1. Identify trend (Market Structure)
2. Wait for liquidity grab
3. Look for CHoCH
4. Enter on Order Block or FVG
5. Set stop loss below/above structure
6. Aim for 1:2 or 1:3 risk reward
7. Risk Management
- Risk 1%–2% per trade
- Always use stop loss
- Avoid overtrading
- Focus on consistency, not profit
A trader survives through risk control, not predictions.

8. Trading Psychology
- Stay disciplined
- Avoid revenge trading
- Be patient for setups
- Think long term
Consistency beats emotion in trading.

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