HPotter

Smart Money Index (SMI)

Smart money index (SMI) or smart money flow index is a technical analysis indicator demonstrating investors sentiment.
The index was invented and popularized by money manager Don Hays. The indicator is based on intra-day price patterns.
The main idea is that the majority of traders (emotional, news-driven) overreact at the beginning of the trading day
because of the overnight news and economic data. There is also a lot of buying on market orders and short covering at the opening.
Smart, experienced investors start trading closer to the end of the day having the opportunity to evaluate market performance.
Therefore, the basic strategy is to bet against the morning price trend and bet with the evening price trend. The SMI may be calculated
for many markets and market indices ( S&P 500 , DJIA, etc.)

The SMI sends no clear signal whether the market is bullish or bearish . There are also no fixed absolute or relative readings signaling
about the trend. Traders need to look at the SMI dynamics relative to that of the market. If, for example, SMI rises sharply when the
market falls, this fact would mean that smart money is buying, and the market is to revert to an uptrend soon. The opposite situation
is also true. A rapidly falling SMI during a bullish market means that smart money is selling and that market is to revert to a downtrend
soon. The SMI is, therefore, a trend-based indicator.
Some analysts use the smart money index to claim that precious metals such as gold will continually maintain value in the future.
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//  Copyright by HPotter v1.0 10/06/2014
// Attention:
// If you would to use this indicator on the ES, you should have intraday data 60min in your account.
//
// Smart money index (SMI) or smart money flow index is a technical analysis indicator demonstrating investors sentiment. 
// The index was invented and popularized by money manager Don Hays.[1] The indicator is based on intra-day price patterns.
// The main idea is that the majority of traders (emotional, news-driven) overreact at the beginning of the trading day 
// because of the overnight news and economic data. There is also a lot of buying on market orders and short covering at the opening. 
// Smart, experienced investors start trading closer to the end of the day having the opportunity to evaluate market performance.
// Therefore, the basic strategy is to bet against the morning price trend and bet with the evening price trend. The SMI may be calculated 
// for many markets and market indices (S&P 500, DJIA, etc.)
//
// The SMI sends no clear signal whether the market is bullish or bearish. There are also no fixed absolute or relative readings signaling 
// about the trend. Traders need to look at the SMI dynamics relative to that of the market. If, for example, SMI rises sharply when the 
// market falls, this fact would mean that smart money is buying, and the market is to revert to an uptrend soon. The opposite situation 
// is also true. A rapidly falling SMI during a bullish market means that smart money is selling and that market is to revert to a downtrend 
// soon. The SMI is, therefore, a trend-based indicator.
// Some analysts use the smart money index to claim that precious metals such as gold will continually maintain value in the future.
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study(title="Smart Money Index (SMI)", shorttitle="Smart Money Index")
xcloseH1 = security(tickerid, "60", close)
xopenH1 =  security(tickerid, "60", open)
nRes = nz(nRes[1], 1) - (open - close) + (xopenH1 - xcloseH1)
plot(nRes, color=green, title="SMI")
DONATE/TIP

BTC: 3FKWwtaYrf5NHZzaCi1fyAfQj7XSgtyCqe
can't get it to work on thinkorswim
Reply
Is this also for BTC???
+1 Reply
Hey.

Please tell me where can I download this indicator (Smart Money Index) for MT4?

Yours faithfully,
Vladimir
Reply
HPotter Vladimir-Trader
@Vladimir-Trader, I do not know.
+3 Reply
Hi
What is the best time frame to use this indicator?

Thanks
+8 Reply
This is not the real Smart Money Index (SMI).

The real basic formula for SMI is:

Today's SMI reading = yesterday's SMI – opening gain or loss + last hour change

For example, the SMI closed yesterday at 10000. During the first 30 minutes of today's trading, the DJIA has gained a total of 100 points. During the final hour, the DJIA has lost 80 points. So, today's SMI is 10000 – 100 + -80 = 9820.
+1 Reply
thanks. how can i get this? i dont see make it mine button
+2 Reply
Tested on TSLA, but the SMI lines seems almost the same as the RSI line. Where is the crucial difference? tnx!
+3 Reply
Thanks HP. This is one I use to use and forgot about. Appreciate your sharing it.
Reply
You are welcome
Reply
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