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Smart Money Concepts or SMC for short is a trading methodology that consists of guidelines and practices of the way large financial institutions trade with the capital they utilise in the financial markets.
These large quantities of “smart money” that enter and exit the markets have the potential power to move the markets, due to the sheer volume.
When you study SMC, you’ll soon realise that its actually based on price action principles, which has been a proven methodology of trading the markets successfully.
I also like the fact that SMC is about what’s happening now in the present moment in the markets and the strategies are based around how to predict the next potential moves based on the current market conditions.
I’ve personally tested a few SMC strategies and had some very positive results so far.
I actually find it more simple to understand and execute SMC strategies, compared to other lagging indicator based strategies that I have tried
Speaking of simple strategies, here are 5 important SMC principles I utilise in my strategies that have been working for me…
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BOS – Break Of Structure – Price has broken a higher high or lower low. This could indicates a potential continuation of market trend/direction
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CHoCH – Change of Character – Indicates potential breakouts and reversal of trend/market direction
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FVG – Fair Value Gap – potential areas for support and resistance and entry points at pull back.
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POI (Point of Interest) – identify potential key levels
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Supply & Demand – In supply and demand zones, if there is more supply than demand, there is a potential of a price going down. If there is more demand than supply, there is a potential for prices to go up.
Supply can also be considered as resistance, whereas demand can be considered as support.
Many traders see supply and demand zones as opportunities to enter and exit markets.
To sum it up, SMC is definitely growing on me!