Knowledge

What is SMC?

Have you ever had such an experience? After you are optimistic about a certain direction and set a stop loss, the market triggers your stop loss first and moves in the direction you originally predicted, making you feel as if the "main force" has targeted it.

SMART MONEY CONCEPT

Inventor：The Inner Circle Trader

Sideways Shock

Prices fluctuate within a certain range

Bull Trend

Prices keep rising

Bearish Trend

Prices continue to fall

SMC 5 CORE TERMS

Break of Structure

Market Structure Break

Liquidity Pools

Order Blocks

Breaker Blocks

In a clear trend, a structural change occurs when a breakthrough happens as the price surpasses the previous high, indicating continued progress! This signifies that the market is moving in its original direction.

The existing market structure is disrupted, leading to a reversal of trends, which drives the trend in the opposite direction.

An area of the market where there are large order executions, usually a large concentration of stop-loss orders, or a location where retail investors are fighting between long and short positions.

An order block occurs when the price rises or falls sharply before the last range of a reverse K-bar. This usually contains a large number of unfilled orders and represents the concentration point where smart money buys or sells. Simply put, it is the main cost area for building positions.

Not all order blocks will be valid. When an order block becomes invalid after being broken through, it turns into a destruction block. The original order block’s real purpose is actually just to obtain the liquidity on the other side (triggering stop-loss orders), allowing smart money to enter the market at more favorable prices.

Search OB

It can be found that the original short trend has changed to SELL TO BUY.

When the short side turns to the long side, the market structure disruption (MSB) must be a strong upward breakthrough to ensure sufficient follow-up momentum and eliminate liquidity. the possibility of breaking through the bottom of the rising period as the main recommendation Warehouse cost area (OB)