Smart Money Concept (SMC) - Complete Chart Examples
Guide
This PDF explains the main concepts of Smart Money Concept (SMC) trading with chart examples. Topics include Market
Structure, Liquidity, BOS, CHOCH, Order Blocks, Fair Value Gaps (FVG), Liquidity Sweeps, Mitigation, Entry Zones, Stop
Loss placement, and Targets.
1. Basic SMC Flow Example
Concept Explanation
Market Structure Identify HH, HL in uptrend or LH, LL in downtrend.
Liquidity Equal highs/lows where stop losses exist.
Liquidity Sweep Price grabs liquidity before actual move.
CHOCH Change of Character indicating possible reversal.
BOS Break of Structure confirming trend continuation.
Order Block Institutional buying/selling zone.
FVG Imbalance area where price may revisit.
Target Next liquidity zone.
2. Advanced SMC Chart Examples
Important SMC Setups:
• Bullish Setup: Liquidity sweep below lows → CHOCH → Bullish Order Block retest → Buy entry.
• Bearish Setup: Liquidity sweep above highs → CHOCH → Bearish Order Block retest → Sell entry.
• Liquidity Grab: Smart money targets retail stop losses before reversing market direction.
• Order Block + FVG Confluence: Stronger setup when OB and FVG align together.
• Mitigation: Price revisits institutional zone to fill remaining orders before continuing trend.
• Risk Management: Keep stop loss outside liquidity and target next liquidity area.
Final Notes:
Smart Money Concept is based on understanding institutional behavior in financial markets. The key is patience, proper
market structure analysis, liquidity understanding, and disciplined risk management. Beginners should first master
structure, BOS, and CHOCH before using advanced concepts like Order Blocks and FVGs.