SMC – Smart Money Concept
Structure Mapping Startup Point: -
4H,1H or 30 minutes for Indian market for Structure mapping
Higher timeframes lowest point should be marked and start it from there by going into smaller
timeframe after marking the lowest point in higher timeframe.
Image 1 – Representing BOS & CHOCH
Break of structure (BOS): -
It is known for continuation pattern be it uptrend or downtrend.
As shown in figure bos is only valid if candle body is closed breaking the previous higher high &
vice versa for downtrend.
If candle body is just taking liquidity and making wick and going down, then it will be called as
bos sweep
And next candle should close body above wick then only it will be valid bos like shown in below
diagram.
Change in character (CHOCH): -
Known for changing the trend as shown in picture above.
For choch to be valid the candle closing is important no wick can be accepted & due to wick
even choch point shift below wick ending. Same as bos
CHOCH will only be valid if HH’s left swing (lower low) is broken for uptrend & for down trend.
Choch points shift if there is IDM and HH is identified and same is taken out by BOS so the
lowest point which has done bos will be your lower low i.e choch point.
To identify higher high/choch point in downtrend it will always form after bos.
To identify lower low/choch point in uptrend it will always form after bos.
Inducement (IDM): -
IDM is nothing but when left sides swing is taken out and then bos is happening is known as
IDM.
IDM will only be valid when BOS responsible lower point is taken out by price above picture
represents it.
Even time hh, idm , bos , choch is confirmed by left side swing when it is taken out. Any doubt
refer HH & HL Identification image
IDM sweep is valid here like shown in above pic even tap is enough for IDM to be valid and bod
close is also valid.
Higher/Lower High & Higher/Lower Low Identification: -
Uptrend
Higher high is only identified when there is IDM in price & higher low is only marked after bos i
happening in this lowest point will be marked as higher low.
Downtrend
Above picture explain about downtrend IDM and BOS & Choch Points.
After IDM until bos is happening the lower high cannot be confirmed hence if you see the price
has broken the lower low and given bos post that the highest point on the left will be your lowe
high.
Swing Identification
2nd candles high should be taken out
th
candle
by 4 in order swing to be valid also no wick should
be present in this structure the body should closendabove
candle2and it liquidity should be
grabbed byrd3candle.
Valid Pullbacks
5th eg inside bar low should be taken out and after that its high should be taken out with body
close.
Invalid Pullbacks
Inside bar concept is important here.
Fair Value Gap: -
Uptrend: -
Eg
For uptrend only after IDM we need to find FVG on the left to buy from there.
Downtrend: -
For downtrend only after IDM we need to find FVG on the left to sell from there.
Order Block: -
Normal OB
It is present mostly with the swings.
It must contain a FVG with it for it to be valid.
Eg: -
Like seen below order block shifted above to next candle as last selling candle didn’t had fvg
with it.
Above order block validation picture
Inside Bar order block eg:-
The box part is order block as red candle has take next candle inside itself.
Order Flow: -
It is important the price is not taping the order flow zone i.e pull back area & if it is taping then
is used hence unused order flow zone with be valid like shown in the picture above.
In Uptrend Selling pullback will have order flows & in downtrend buying pullbacks will have
order flows
Blue zone have pull back and it created a order flow as seen below.
Refine Order Blocks
Example of higher timeframe bearish order block.
As seen in pic below the vic part become order block zone.
Liquidity & its types: -
External Liquidity
Daily Candles Liquidity
Above example represents how to take the trades – Daily candles
Points to remember
If trend is uptrend and the poi candle will not take previous candle low liquidity and continue th
uptrend after taping nearest poi zone which is present near to previous day low. Vice versa for
downtrend.
The zone which we need to focus where previous days liquidity is taken out.
Here we need to take the first swing which should be IDM as Choch point so that we can plan f
buying trades or selling trades.
Swing High/Low Liquidity
In downtrend above bos we need to sell & and in uptrend we need to buy below bos.
Selling: - For selling After Choch there comes huge buying till Choch point or very first order
block above selling point as seen in above picture after that it continues.
After choch the nearest order block will be the point where we can buy & plan for counter trad
Buying: -For buying choch there come huge selling till near till choch point or very first order
block & after that it continues.
After choch the nearest order block will be the point where we can sell & plan for counter trade
Above & Below is entry module for selling choch & plan is for counter trade which comes after
choch for selling side.
Same example with go with trend as below.
Bos Sweep & Choch Sweep
Above example for bos sweep trades
Below example for CHOCH sweep
Below is downtrend example for bos & choch sweep
Internal Liquidity
Above example is for uptrend same happens in downtrend as well below is the example.
For downtrend as well they will make all types for pattern so that everyone thinks it is for buyi
but in real they are planning to sell only
POI (entry modules): -
Sweeps entry modules
Above modules probability is 50%
Below images probability is 95 to 100%
& If the above structure is made in 30 minutes or in any higher timeframe then the probability
above setup success goes to 75 to 80%
Below is more example and info for entry module
In case IDM is taken out then below photo indicates entry module
More examples: -
Bos sweep example
Buying
Bos Sweep examples
Choch sweep example
Higher timeframe analysis
Institute entry identification below
POI point below
Below is the example of volume imbalance & gap imbalance
It means there is no candle body intersecting between 2 consecutive candles.
More details below
Point to remember
If order blocks are taped it becomes little ineffective not fully
15 minutes entry module below
Below e.g. for volume imbalance plus above image explained more
Daily timeframe image below
Go to 5 minutes image below
Further explanation of above example
Below is example of higher timeframe what is happening there.
Order Block Types
Fib Retracement
If trend is up, we need to buy from discount zone
If trend is down, we need to sell from premium zone
Advance Order Block
Above is downtrend example below being uptrend
Candle lookup points below
More candles look up points below
More candles look up points below
Buying example below and it is counter trade
More examples
Check for IDM after that FIB retracement and then find imbalance
More example
Mitigation Block
Selling example above
More example
Selling example
Example in real market
Buying example
Breaker Blocks
Above is bearish example
Buying example below
Examples
There must be multiple reason to execute our orders.
Rejection Block
If candle is closing above mean threshold, then this setup has probability of 10% only to
succeed so closing is important for above bearish rejection block
Below is buying example
Note:- If small timeframe then there must be multiple vics & if it is forming in higher timefram
then 1 vic is also enough.
When should we take trade based on Rejection block below:-
All the order block and FVG are filled or there should be no ob or fvg near or if there is previou
days end or opening liquidity present
Eg
More eg – 30 min timeframe
Reclaimed Order Block
ITH, ITL, STH, STL
3 Candle Swing
Higher timeframe must be referred here
And mostly price find the poi
Zoomed out pic
For buying 3 candle it indicates trend change and for selling it as well indicates trend change a
depending on higher timeframes POI
For buying formation it forms until the next poi is done and the swing or low is not broken unti
POI is done
Same for selling the high is not broken until poi is meet.
Above volume imbalance is stronger because it has FVG, ob with it which makes it stronger
Below are the examples of above and it trade plan in lower timeframe
Above setup had multiple confirmations to go long
BPR (Balance Price Range) in sort
For above BPR there should be no vic in between like marked above
ITH, L & STH, L
In uptrend first ITH is formed after that ITL must form so that ITH is broken and pattern is
continued until next bias
Same for Downtrend first ITL is formed after that ITH must form so that ITL is broken and patte
is continued until bias is done
Above images explain above lines
Chart Example
Above Uptrend example
Below ITH/l & STH/L timeframe importance
Above 1 min timeframe and in 15 minutes it is STL – Nov 3,2024 bank nifty
Bias
Time & Price Theory
Daily Bias
Above green candle below in lower timeframe below
Above image is daily candle
Above image has displacement after that price tapped FVG and volume imbalance post that
price continued upside
Dealing Range
