Smart Money Concepts

Smart Money Concepts (SMC): a plain-language guide

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Smart Money Concepts, or SMC, is a way of reading price charts through swing structure, liquidity and imbalance. These pages explain each term with a diagram, a step-by-step way to spot it and the mistakes that trip up beginners.

An honest note: SMC is a discretionary chart-reading framework. There is no proof that it is profitable on its own, and the idea that 'smart money' leaves visible footprints on a candle chart is a hypothesis. Use it as a way to organise what you see, test it on past charts, and size your risk small.

Suggested order

  1. Market structure
  2. Break of Structure (BOS)
  3. Change of Character (CHoCH)
  4. Fair Value Gap (FVG)
  5. Order Block (OB)
  6. Liquidity Sweep
  7. Premium & Discount Zones
  8. Inducement

All SMC concepts

Market structureMarket structure is the sequence of swing highs and swing lows that defines a trend. Learn HH, HL, LH…Break of Structure (BOS)A Break of Structure (BOS) is a candle close beyond the last swing high or low, in the trend's…Change of Character (CHoCH)A Change of Character (CHoCH) is the first close beyond the last higher low in an uptrend or lower…Fair Value Gap (FVG)A Fair Value Gap (FVG) is a three-candle pattern where the wicks of candles 1 and 3 do not overlap.…Order Block (OB)An Order Block is the last down candle before a strong up move, or the last up candle before a strong…Liquidity SweepA liquidity sweep is when price pokes beyond an obvious high or low, where stop orders tend to rest,…Premium & Discount ZonesPremium and discount zones split a price range at its 50% midpoint. Learn how SMC traders judge…InducementInducement is a small, obvious swing inside a pullback that tempts breakout traders and gets taken…

Forex trading by Indian residents is restricted to certain pairs and regulated brokers. Read Is forex trading legal in India? before trading currencies. The same chart ideas can be studied on NSE stocks, indices and crypto charts.

Practise this on a live chart

Our free Super EMA + SMC indicator for TradingView marks structure for you. Want guided practice? See the Market Dekho mentorship.

Super EMA indicator Mentorship details

Look up any term in the glossary.