SMC Smart Money Trading Strategy|Identifying Institutional Capital Trends
Do you want to trade like professional institutions?
The core of the SMC (Smart Money Concept) strategy lies in
identifying the footprints of "smart money"
by capturing high-probability opportunities through changes in market structure
1. Order Block Trading Strategy
• Concept: An order block is an area where large institutional orders are concentrated,
typically appearing during consolidation phases before significant volatility
• Bullish Entry: In a downtrend,
if a bullish candlestick appears followed by a price reversal upward, the area is considered a bullish order block.
Buy when the price retraces to this area.
• Stop Loss Placement: Set the stop loss below the low point of the order block.
2. Break of Structure Strategy (BOS)
• Concept: When the price breaks through key highs or lows of the original trend, it indicates that the trend may continue.
• Operation: In an uptrend, after the price breaks the previous high (BOS), wait for a pullback to the demand area to buy.
• Bearish Application: After the price breaks the previous low, sell when it retraces to the supply area, and set the stop loss above the signal candlestick's high.
3. Equilibrium Reversal Strategy
• Concept: After market fluctuations, prices often retrace to supply and demand equilibrium areas,
such as the 50% or 61.8% Fibonacci retracement levels.
• Discount and Premium: Below 50% is the discount area,
look for bullish opportunities; above 50% is the premium area, look for bearish opportunities.
• Entry: When the price retraces to the equilibrium area (red/green line area),
enter based on the signal.
4. Trend Reversal Strategy (CHOCH)
• Signal Identification: When the price forms higher lows (HL) in a downtrend
and breaks the previous high, forming a CHOCH signal, indicating that the trend may reverse.
• Bullish Entry: After the price breaks the previous high, buy when it retraces to the order block or demand area, targeting the next liquidity area.
• Stop Loss Placement: Set below the low point of the signal candlestick.
The SMC strategy is not just about looking at charts, but also about understanding the liquidity operations behind the market.
The above is a personal opinion shared and does not constitute investment advice; friends are advised to evaluate cautiously.
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