Smart Money Concepts forex PDF introduces SMC, focusing on market structure, liquidity, and entry skills. It emphasizes understanding price dynamics through concepts like momentum and correction, where institutional players dominate momentum phases, while retail traders often get trapped in corrections.
As a finance blogger, I recently explored the “Smart Money Concept (SMC) [EbookHAY.net]” eBook, a concise guide for traders looking to master institutional trading strategies across markets like Forex, stocks, and cryptocurrencies.
The eBook introduces SMC, focusing on market structure, liquidity, and entry skills. It emphasizes understanding price dynamics through concepts like momentum and correction, where institutional players dominate momentum phases, while retail traders often get trapped in corrections. A key rule for identifying corrections is a candle breaking a previous high/low and closing with a body or shadow above/below, signaling a reliable pullback.
Market structure is broken down into Break of Structure (BOS) and Change of Character (CHOCH). BOS indicates trend continuation, while CHOCH signals reversals, often validated by an inducement (IDM). The eBook stresses the importance of a full candle close to confirm these structures, warning against false signals from shadows. It also covers imbalances or Fair Value Gaps (FVG), which are price gaps used to mark Points of Interest (POI) and order blocks for entries.
Order Flow (OF) and Order Blocks (OB) are central to SMC. OF identifies the last buy/sell move before a momentum shift, while OBs are zones where smart money enters, marked by liquidity sweeps and imbalances. The eBook highlights two OB types: Decisional (first block near IDM) and Extreme (at the impulse’s start), advising traders to avoid traps from other blocks.
Liquidity is a recurring theme, categorized into retail, session, and daily types. Retail liquidity involves patterns like support/resistance and trendlines, often manipulated by smart money. Session liquidity focuses on highs/lows during trading sessions (Asia, London, New York), with reversals likely when one session manipulates another. Daily liquidity follows a similar logic, using breakouts of previous candles to confirm trades on lower timeframes (e.g., M15).
For entries, the eBook outlines high-probability setups like CHOCH, BOS, and FLiP, alongside liquidity sweep entries. Multi-timeframe analysis (e.g., H1 for higher timeframes, M5 for confirmation) is recommended for precision. Risk management is emphasized, advocating a 1-2% risk per trade for personal accounts and 0.25-1% for funded accounts, with a focus on protecting stop-losses and aiming for realistic risk/reward ratios (1:5 to 1:10).
Overall, this eBook is a practical resource for traders seeking to align with institutional strategies, offering clear examples and a structured approach to mastering SMC. It’s a must-read for those ready to trade with discipline and patience.