SMART MONEY CONCEPTS STRATEGY - The Prop Trader
SMART MONEY CONCEPTS STRATEGY - The Prop Trader
Protected: SMART
MONEY CONCEPTS
STRATEGY
FX TRADING SESSIONS AND KILL ZONES
Essentially the FX trading day can be broken into 6 Sessions:
CBDR – 1500 – 1900 ET (No Trading)
Asia Range – 20:00 – 00:00 ET (No Trading)
LD Open Kill Zone – 02:00 – 05:00 ET
NY Open Kill Zone – 07:00 – 10:00 ET
LD Close Kill Zone – 10:00 – 12:00 ET (includes LD Fix 11:00 ET)
PM Session – 1200 – 1500 ET (No Trading)
Kill Zones allow us to narrow our focus to these windows of opportunity.
Time of day is more important than price.
Only trading during the London and New York Kill Zones will greatly
improve your strike rate. Swing Highs and Lows are formed within these
areas most of the time. The US Data Embargo is lifted at 0830 ET right
inside the NY Kill Zone, this can act as a catalyst for trade set ups.
Asia is usually Consolidation or Accumulation
London can see a Judas Swing to form the HOD/LOD
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Knowing the probabilities before trading a particular pair can greatly
improve your risk reward.
Depending on the FX pair one of these sessions is more likely to set the
low of the day (LOD) or the high of the day (HOD). For example EURUSD
has a 50% chance of setting the LOD or HOD during the NY Kill Zone,
allowing a stop to be placed more con dently.
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The probability for the LOD or HOD being set in Asia or LD drops to 25%. If
LD takes out the Asian Kill Zone High or Low, there is a high probability LD
will set the LOD or HOD.
Here are some stats for EURUSD:
Asia KZ (20:00 -00:00 ET) – 25% D-HIGH/D-LOW
LD KZ (02:00 – 05:00 ET) – 25% D-HIGH/D-LOW
NY KZ (07:00 – 10:00 ET) – 50% D-HIGH/D-LOW
LD FIX (11:00 ET)
SQN (NEUTRAL) – 60%
W-HIGH – 50% MON/FRI
W-LOW – 60% MON/FRI
CME/INDEX TRADING SESSIONS AND KILL ZONES
AM Session – 0830 – 1200 ET
Lunch – 1200-1300 ET (No Trading)
PM Session – 1330-1600 ET
Overnight – 1600 – 0830 ET (No Trading)
TRADINGVIEW CUSTOM SMC INDICATORS
A chart including all indicators required to trade SMC on an intraday basis:
TRUE DAILY OPEN (TDO) TIME & PRICE
DATA EMBARGO TIME & PRICE
OPTIMAL TRADE ENTRY (OTE) WINDOW
ASIA RANGE
MONDAY RANGE
LONDON/NEW YORK/CLOSE KILLZONE
HTF/LTF FVG/IMBALANCE
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INTRADAY TEMPLATES
The ICT Intraday Market Makers template work everyday in every asset
class and won’t stop. It can help you get a better understanding of price on
an intraday basis and the game plan of the Market Makers.
The market is a playing ground for the Market Makers and following the
footprints can help you to make the right decisions in your trading.
The templates work both for buys and sells.
The templates alone don’t work if you haven’t framed your setups based
on the higher time frames. You should treat the hourly chart just like the
daily chart.
THE BUY TEMPLATE
It unfolds mostly on Monday, Tuesday and latest on Wednesday
It is the best template to make easy money
It happens during the London session. New York session will
eventually give a retracement to continue with the trend that was
set during the London session
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The daily range will last for 7 to 8 hours once the pro le is
established
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Mostly, it will give a drop of about 15 to 30 pips from the daily
opening price during the London session. This is the best time to
take your buy positions
When this pro le is established, the Low of the Day will happen
during London session
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Ideally, it can also move a bit higher a little bit from the opening price
but the idea is that it must drop
LONDON SWING TO Z DAY
Happens in the middle of a larger price swing when the trend is
exhausted after a large explosive move
Ideally it occurs on a Thursday
Price will initially drop below the opening price then run above the
opening price and goes back to the range back consolidation
Will rst unfold as the Buy template
If it continues consolidating, DON’T look for continuation in New
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York
Always take pro ts in the beginning of New York if this pro le
unfolds
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LONDON SWING TO NYO/LDC REVERSAL
It always begins like a classic Buy template with a decline of about
15 to 30 pips below the NY Midnight opening price then rallies
Once it drops, it forms a buy entry then rallies in to a higher time
frame Point of Interest like a bearish OB, to close in to a FVG, OTE,
etc.
If it happens during New York session, it indicates classic market
reversal pro le
The template is used by the Market Makers to either reach for a
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Higher Time Frame bearish Order Block (OB), turtle soup or even to
close a range
It will rst create initial low of the day during London session, run up
and create high of the day during New York or London Close, then
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run down, clearing the initial low that was created during the London
session
Ideally can pan out after the market is in an exhaustion based on the
HTF dominant trend
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The Interest Rate markets control everything around the world. If the bond
markets are dropping lower…this means interest rates are going higher,
which in turn drives the USD higher.
Interest Rate Markets: ZB (US30Y T-Bond), ZN (US10Y T-Notes), ZF
(US05Y Note), ZT (US02Y Note).
All of the above are inversely related to the US Dollar Index (USDX/DXY).
Check for SMT.D between the interest rate markets at moments when the
USDX is at a significant price level.
Failure Swings highlight Smart Money participation in the markets and
trading opportunities are validated.
FLIP ZONE (FZ)
This is when Resistant becomes Support & vice versa.
SIGNIFICANT SUPPORT & RESISTANCE (SSR)
SSR is a Flip zone tested many times. This is where the Market Maker
comes back to mitigate their loses.
Since SSR is a STRONG ZONE where Retail Traders place their orders
(Stops Orders), the MM will want to activate/manipulate their orders
before resuming the initial direction.
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Regarding the above 8 features of Tradable OBs, which one would you
consider as your top 2
con rmation? Well, it’s upon you to back test and choose the trading
method that suits you.
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When trading this method, be sure to stick to your Time Frame Matrix
depending on the type of trader you are:
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A Bullish Breaker (BB) is the last down close candle(s) in a swing low prior
to a higher high. It becomes valid once stops are taken above a previous
high and breaks below the swing low that contains the breaker candle.
Bulls are trapped here and institutions are mitigating longs.
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MITIGATION
Mitigation means; to reduce risk.
When the MM moves price away from a level with strength and
magnitude, say they are buying; it is assumed that they are enticing retail
traders to join the move.
And because most retail traders chase price, they join the ride with their
SL set not too far away.
This is the reason that the MM will come back to clear retail traders SL.
When their SL are hit, they are knocked out of the move, hence MM
mitigating their risk
To know that the MM are mitigating, there are a number of things you
need to consider.
For instance, the LV must accomplish some tasks before validating the OB.
To validate a BuOB with a Bullish LV:
LV should take out opposing OB or
LV should Break Out Market Structure or
LV should Create Equal High EQL. This is valid if the price is
bouncing from HTF BuOB (For Reversal Entry) or a trading market
(for re-entries)
HTF OBs are more effective than LTF OBs, especially when these
conditions are met.
The short trade should be covered on reaching the FVG at approx. 1.1325.
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This is an imbalance left over from the move higher in the Asia Session
(19:45 EST), where price moved quickly from 1.1320 to 1.1330 without a
pullback to allow buyers the opportunity to execute their orders.
If a previous YEARLY HIGH / LOW is raided, price action will pullback and
fill the nearest WEEKLY FVG. The same applies to the lower timeframes:
MONTHLY HIGH / LOW = DAILY FVG
WEEKLY HIGH / LOW = H4 FVG
DAILY HIGH / LOW = H1 FVG
H4 HIGH / LOW = M5 FVG
H1 HIGH / LOW = M1 FVG
The OHLC of the previous HTF candle will give you all the context you
need for a bias. Wait for the previous HTF candle HIGH or LOW to get
raided, then pick your LTF to execute on & create a blueprint for entry &
invalidation.
NEW MONTHLY CANDLE
Locate previous relevant Weekly Highs & Lows
Locate previous Daily Highs & Lows
Locate Weekly/Daily FVGs & inef cient price.
This new monthly candle should ll in these levels.
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Use lower TF’s for entries to target these levels.
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LIQUIDITY POOLS
In the simplest way possible, Liquidity is a measure of the ease of ability to
enter and exit a
market at the desired price based on the number of buyers (bids) and
sellers (asks/offers) in
that market.
The primary objectives of the Market Maker in respect to liquidity is:
To make a market in by buying and selling from their own inventory,
when public orders to buy or sell the asset are absent.
To keep the market book of orders, consisting of limited orders to
buy and sell, as well as stop orders placed by the general market
participants.
Generally, if you understand these two points, you will know how the MM
make fake out and
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Support & Resistance – EQL & EQH: Always wait for fake-out at the
SnR zones
Compression: This is the best way to know if price is retracing
Daily, Weekly and Monthly Lows and Highs are sources of liquidity that are
commonly hunted before reversals can occur.
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High-Base
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Target Opposing Liquidity – SSL
Accumulation – Manipulation – Distribution – AMD
Pairing of Orders
IPDA Data Ranges are 20-40-60 Trading Days.
IPDA moves price from External Range Liquidity (Swing High/Low) to
Internal Range Liquidity (FVG) back to External Range Liquidity (Swing
High/Low).
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3 BAR SWING
3-Bar Swing High = Left Candle Lower High (LH), Middle Candle Higher
High (HH), Right Candle Lower High (LH) & Close Below Middle Candle Low
(L)
3-Bar Swing Low = Left Candle Higher Low (HL), Middle Candle Lower Low
(LL), Right Candle Higher Low (HL) & Close Above Middle Candle High (H)
We also need Support/Resistance and Break in Market Structure (BMS).
High Probability BMS consists of the following:
Accumulation below HTF Resistance/above Support
Manipulation & 3-Bar Swing High/Low
Distribution – Pairing of Stops into Resistance/Support
Smart Money Reversal – SMR
Impulsive Move back thru 3-Bar Swing High/Low
Creating Fair Value Gap FVG
TIME PRICE OPPORTUNITY (TPO)
By using a TPO chart, you are able to analyze the amount of trading
activity, based on time, for each price level the market traded at for any
given time period.
Each letter would be a TPO and the way these are built is, as price trades it
prints a TPO. Each bracket is a half-hour that it represents. As the market
moves up and down there is a distribution of the TPO lines.
One of the key things that traders utilize and bene t from by looking at a
TPO chart, is that it helps you look at how a market is backing and lling,
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trading up and down, and where it tends to revert to. It provides a unique
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view of the market, whereas a candlestick chart looks at them horizontally
over time as 30-minute bars. But if you were to compress these and just
stack them all up, that’s what you end up having on the TPO chart.
A single letter shows where the price is quickly rejected from and can be
pivotal.
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WYCKOFF METHOD
There are many other SMC strategies that can be traded, many are
focused around “Accumulation” and “Distribution” as seen in the Wyckoff
Method:
APPENDIX
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gEbRyH-3QUHA?usp=sharing <
https://drive.google.com/drive/folders/1qKENSDC5dnDGfou5oyv-
gEbRyH-3QUHA?usp=sharing>
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1 Comment
Anonymous
Sir can you please post about how to identify orderflow and how to
determine daily bias and draw on liquidity please
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