What Is Smart Money Concepts (SMC)-Explained

📘 What is SMC (Smart Money Concepts)?

SMC — Smart Money Concepts — is a trading methodology that focuses on how institutions, banks, and big players move the market.
Instead of chasing indicators, SMC analyzes liquidity, market structure, supply & demand zones, order blocks, and breaker levels to identify where smart money enters and exits the market.

Smart Money leaves footprints on the chart — SMC helps you read those footprints.


🧠 How to Use SMC in Trading

Here’s the simple step-by-step SMC framework:

1️⃣ Identify Market Structure

Determine trend direction
Look for HH, HL, LH, LL
Wait for break of structure (BOS) or change of character (CHOCH)


2️⃣ Mark Supply & Demand Zones

Demand Zone → where institutions buy
Supply Zone → where institutions sell
These zones give high-probability entry points.


3️⃣ Spot Order Blocks (OB)

Last bullish/bearish candle before strong move
Smart Money often re-tests OB before continuing trend


4️⃣ Track Liquidity

Find where retail traders keep their:
Stop-losses
Equal highs/lows
Trendlines
Smart Money hunts liquidity before pushing price to the real direction.


5️⃣ Wait for Confirmation Entry

You can enter with:
OB retest
Demand/Supply reaction
Liquidity sweep + CHOCH
FVG (Fair Value Gap) fill


6️⃣ Manage the Trade

TP at next liquidity zone
SL below/above protected swing

Follow the trend, not the noise