---
title: 'Smart Money Concept Trading Strategy Backtest'
source: 'https://youtube.com/watch?v=0pUU5bPoFPY'
video_id: '0pUU5bPoFPY'
date: 2026-07-19
duration_sec: 303
channel: 'Smart Risk'
---

# Smart Money Concept Trading Strategy Backtest

> Source: [Smart Money Concept Trading Strategy Backtest](https://youtube.com/watch?v=0pUU5bPoFPY)

## Summary

This video presents a backtested trading strategy based on Smart Money Concepts (SMC) applied to the EUR/USD pair over three months. The strategy uses a two-step approach: first analyzing market direction and order blocks on the 1-hour timeframe, then waiting for a change of character (CHoCH) on lower timeframes to enter trades. The backtest, conducted with a $10,000 account and 2% risk per trade, yielded a 68% profit despite a modest win rate, with key advantages including simplicity, CHoCH as a filter, and trailing profits.

### Key Points

- **Strategy Overview** [00:02] — The strategy is based on Smart Money Concepts, backtested on EUR/USD for three months using Soft4FX on MetaTrader 4. Initial account: $10,000, risk per trade: 2%. Trading hours: London open to New York close.
- **Step 1: Market Direction and Order Blocks** [00:53] — Analyze the 1-hour timeframe to identify market direction and high-potential order blocks. Example: demand in control, broken structure to upside with inefficiency, leaving a perfect order block demand zone with room to move higher before reaching higher timeframe supply zone.
- **Step 2: Entry with Change of Character** [01:20] — Wait for price to reach the order block, then look for a change of character (CHoCH) formation on lower timeframe as entry reason. If no CHoCH, no trade. Stop-loss placed below the swing low.
- **Entry Scenarios** [01:51] — Two scenarios: (1) If CHoCH creates an inefficiency/order block, place buy order a spread size above the order block with stop-loss below swing low. (2) If CHoCH does not create an order block, place buy order at the middle of 618-786 Fibonacci retracement levels.
- **Profit Taking: Trailing Stop** [02:17] — Trail profit by repositioning stop-loss below each new order block as market moves, until reaching higher timeframe supply zone. This allows capturing significant profits without pressure.
- **Advantages of the Strategy** [03:02] — 1) Simple and easy to implement with minimal indicators. 2) Using CHoCH as entry reason avoids losses when market ignores order blocks. 3) Trailing profits captures large moves (once in 10 trades) for high risk-reward, though requires patience.
- **Backtest Results** [04:15] — Over three months on EUR/USD, the strategy achieved 68% profit despite a low win rate. The presenter notes that live trading results would likely be lower due to emotional factors.

### Conclusion

The Smart Money Concept strategy, while having a low win rate, can yield substantial profits through trailing stops and disciplined entry using change of character. However, live trading performance may be lower due to psychological factors.

## Transcript

test of my trading strategy which I created based on the smart money trading Concepts after spending hours for the back testing we came up with pros and cons and exciting results about the win rate
of this trading strategy which I will explain in this video explain in this video for the back testing I use soft4fx on metatrader4 which is a Forex simulator with real data that allows you to trade
on the past and conclude the results I used ten thousand dollars for the initial account size and two percent risk per trade I back tested this strategy for three months and only looked for trading
opportunities from London open till the New York close so first let me explain the strategy I used with all of the rules and then I will show you the results I got this strategy has two steps
in the first step I analyze the market Direction and Mark high potential order blocks for trading in the one-hour time frame for example here we can clearly see the demand is in control
the market has broken the structure to the upside with inefficiency leaving a perfect order block demand Zone behind also we have enough room for the price to go higher before reaching the higher time frame Supply Zone
in the second step I wait for the price to get to my order block and zoom into the trade after the price reaches the order block for the entry reason I want to see a change of character formation to
over and the market can potentially start to move to the upside if we see no change of character then we will have no trade for executing the trade I want my stop-loss protected below the swing low
but here are two scenarios when executing the orders if the change of character move creates an efficiency therefore an order block I will place my buying position a spread size above the order block with my stop
loss being a couple of Pips below the swing low but if the change of character move does not create an order block I will place my buying position precisely in the middle of the 618 and 786 Fibonacci
retracement levels and for taking profits I will track my profit meaning that every time Market makes a new order block I will reposition my stop below the order block until we reach our higher time frame
Supply Zone this way you can achieve a significant profit without any pressure keep in mind that everything I mentioned applies to the bearish scenario to learn more about smart money trading
strategies check the links added to the description now let's back test this trading strategy for three months on euro dollar strategy for three months on euro dollar and see how things will work
testing we came up with some of the pros and cons of this trading strategy the first advantage of this trading strategy is that it is very simple and instead of having multiple lines drawn on your chart and considering multiple
indicators and factors this strategy is easy to implement and you know exactly the chart the second advantage of this strategy is using the change of character concept as an entry reason which can save you from
losses many times sometimes the market ignores the order blocks which happens when the other side is highly in control so a change of character in lower time frames entry reason is helpful to not
enter the losing trades the third advantage of this strategy is tracking the profits we have noticed that once in 10 trades the market goes highly in our favor so by tracking the profits we could gain
risked so this system for taking profits is better than having a solid one to two target or Etc but it requires more patience and time now let's see the results of back
testing so this is the overall result that we got after back testing this strategy on euro dollar for three months we have realized that although the win rate of this
strategy is not that high but we gain 68 profit but remember in my opinion this percentage will be much lower if you traded live because you have to deal with the emotions
so guys I hope you found this video interesting and helpful please remember to like this video And subscribe to our Channel if you still need to also if you have any questions or suggestions for the following videos let
us know in the comments see you in the next episode