Steps to Enter a Trade Using the Smart Money Concept
If you want to trade like the big players, you need to understand how Smart Money moves the market. Here’s a simple breakdown of how to enter a trade using the Smart Money Concept (SMC):
1. Identify Market Structure
First, determine if the market is in an uptrend or downtrend.
• Uptrend: Look for higher highs (HH) and higher lows (HL).
• Downtrend: Look for lower highs (LH) and lower lows (LL).
Understanding structure helps you know where Smart Money is likely to move next.
2. Find Liquidity Zones
Smart Money targets liquidity—areas where stop losses are stacked.
• Liquidity is often found above resistance and below support.
• Before making a big move, the market often sweeps liquidity (stop hunts).
3. Wait for the Stop Hunt (Liquidity Grab)
Before a real move, institutions often manipulate price to trigger retail traders’ stop losses.
• This is usually a fake breakout above resistance or below support.
• Once liquidity is taken, Smart Money enters in the opposite direction.
4. Identify Supply & Demand Zones
Look for order blocks (OBs)—areas where Smart Money has placed large trades.
• A valid order block forms before a strong move in price.
• Price will often retest these areas before continuing in the main direction.
5. Enter the Trade with Confirmation
Once price returns to your order block, wait for confirmation:
• A strong engulfing candle or break of structure confirms Smart Money is active.
• Use lower timeframes (M5, M15) for precise entries.
6. Manage Risk & Execute the Trade
• Set your stop loss just outside the order block to avoid unnecessary risk.
• Aim for at least a 1:3 risk-reward ratio.
• Secure profits at key levels by scaling out of the trade.
Final Tip: Be patient. Smart Money doesn’t rush—neither should you.
Let me know in the comments: Which part of SMC do you struggle with the most?
#SmartMoneyConcept #ForexTrading
If you want to trade like the big players, you need to understand how Smart Money moves the market. Here’s a simple breakdown of how to enter a trade using the Smart Money Concept (SMC):
1. Identify Market Structure
First, determine if the market is in an uptrend or downtrend.
• Uptrend: Look for higher highs (HH) and higher lows (HL).
• Downtrend: Look for lower highs (LH) and lower lows (LL).
Understanding structure helps you know where Smart Money is likely to move next.
2. Find Liquidity Zones
Smart Money targets liquidity—areas where stop losses are stacked.
• Liquidity is often found above resistance and below support.
• Before making a big move, the market often sweeps liquidity (stop hunts).
3. Wait for the Stop Hunt (Liquidity Grab)
Before a real move, institutions often manipulate price to trigger retail traders’ stop losses.
• This is usually a fake breakout above resistance or below support.
• Once liquidity is taken, Smart Money enters in the opposite direction.
4. Identify Supply & Demand Zones
Look for order blocks (OBs)—areas where Smart Money has placed large trades.
• A valid order block forms before a strong move in price.
• Price will often retest these areas before continuing in the main direction.
5. Enter the Trade with Confirmation
Once price returns to your order block, wait for confirmation:
• A strong engulfing candle or break of structure confirms Smart Money is active.
• Use lower timeframes (M5, M15) for precise entries.
6. Manage Risk & Execute the Trade
• Set your stop loss just outside the order block to avoid unnecessary risk.
• Aim for at least a 1:3 risk-reward ratio.
• Secure profits at key levels by scaling out of the trade.
Final Tip: Be patient. Smart Money doesn’t rush—neither should you.
Let me know in the comments: Which part of SMC do you struggle with the most?
#SmartMoneyConcept #ForexTrading
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