Align your trades with institutional order flow.
Start Automating Free βWant to automate this strategy? Try auto-Trading free β no credit card required.
Overview
Smart Money Concepts (SMC) is a trading framework that attempts to model the behaviour of large institutional participants β banks, hedge funds, and market makers β who collectively move prices in search of liquidity. Unlike retail-oriented approaches that focus on lagging indicators, SMC emphasises reading raw price action to understand where institutions are accumulating or distributing positions.
The framework is built on several core concepts. Liquidity refers to clusters of stop-loss orders sitting above swing highs or below swing lows. Institutions drive price into these zones to "hunt" the stops, triggering a large pool of orders that they use to fill their own positions. After the sweep, price reverses sharply.
Market structure is analysed through the identification of Higher Highs (HH), Higher Lows (HL), Lower Highs (LH), and Lower Lows (LL). A Break of Structure (BOS) or Change of Character (CHoCH) signals a potential trend reversal or continuation. Order Blocks β the last up or down candle before a significant impulsive move β serve as high-probability re-entry zones. Fair Value Gaps (FVGs) and Breaker Blocks are used to fine-tune entry timing and set precise risk levels.
SMC is holistic: it combines liquidity analysis, market structure, order blocks, FVGs, and time-of-day considerations into a comprehensive methodology for identifying high-probability trade setups with well-defined risk.
Strategy Code
This is a TradingView Pine Script strategy example for this page concept. Paste it into the TradingView Pine Editor, add it to your chart, and run it in the Strategy Tester.
//@version=6
strategy("Smart Money Concepts (SMC)", overlay=true)
emaFast = ta.ema(close, 20)
emaSlow = ta.ema(close, 50)
bullStructure = close > emaFast and emaFast > emaSlowThis is a thinkorswim ThinkScript strategy example for this page concept. Open thinkorswim, create a custom strategy, paste the script, and apply it to your chart.
def fast = ExpAverage(close, 20);
def slow = ExpAverage(close, 50);
def liquidityGrab = low < Lowest(low, 10)[1] and close > open;
def buySignal = close > fast and fast > slow and liquidityGrab;
def sellSignal = close < fast;Join thousands of traders who use auto-Trading to execute this strategy automatically, 24/7.
Explore More
All Strategies & Signals