[00:00] appreciating its value as if you paid for it. that you can use to plot the value gap on your chart this for free! Remember, nothing lasts forever.
[00:15] So, this concept called the "smart money concept" has So, what exactly is the smart money concept? Many people
[00:28] 1:20 target and make a lot of money. But is it really What is this concept and how can you apply it step by step,
[00:40] when you can apply it and when you should not apply it. So if I say that this video is going to be a complete course on smart money concept and that too free of cost,
[00:54] free on the internet, but its value will be as it is a paid this video in the real market for a while, whether it's
[01:08] get and then share your feedback on the smart money What do we do today? See, most of the people on our channel are beginners.
[01:22] We will talk step by step and try to explain smart money First things first, we'll head over to the blackboard and dive into the fundamentals of smart money, including its
[01:36] And what are the terms of smart money concept, we are going If you keep noting everything together, then you will not face any problem in the examples that we are going to show.
[01:50] You are going to find out all these things. Ok, so first of all, we understand the smart money concept The smart money concept came from the Dow theory.
[02:05] So as you know, Dow used to be called the father of They gave us a theory that whenever the price moves in a Whether you are moving in an uptrend or a downtrend.
[02:18] So now we are going to talk about the proper uptrend. Where you will understand where you should take the trade First things first, let's define uptrend in Dow theory. It
[02:34] So Dow used to say that the price will never go up like The price will always go up in a correct pattern.
[02:49] So this pattern is basically called higher highs and higher So first of all, the price made a low and then it made a Then the price retraces and then it makes a higher low.
[03:01] Once the price surpasses the previous high, it creates a Now what will the price do? But at any cost, it will not break the previous high or low.
[03:20] Like it made here. Then after this, it will again break the higher high. And it will make a new high which we will again call higher
[03:34] Now here on the smart money concept, we are calling it But when this structure breaks, it has a definition.
[03:46] So we call this BOS. This is called BOS which has a full form of Breakout of So as you can see, it formed a BOS here.
[03:59] Then again it formed a BOS here. is consistently moving upwards. Now by changing the character, what exactly do I mean?
[04:14] In which trend is the price moving? Is the price in an character will not change. to you later on how the character changes.
[04:28] Now see guys, what did we put here? After this, the price put a new higher high. So now when the price will come below this low,
[04:40] This is called a change of character. It means change of character. Now it has changed its character here.
[04:55] So now let's understand what are the strategies of smart And how we can implement it in our trading. It becomes very difficult for you to mark a trend.
[05:12] We are going to use Heiken Ashi candlesticks. So what is the motive of using Heiken Ashi candlesticks? Let's show it in continuation here.
[05:26] You can see here that you have normal candlesticks. Then your candles will look like this.
[05:39] So let's learn how to mark a trend here. So guys, here you will see two types of candles.
[05:51] We have to keep a simple concept here. A wave of uptrend. Red candle represents a retracement.
[06:06] So higher lows will be formed on the low of the red candle. green candle. This is how we can mark a trend.
[06:21] As you can see, this is a relevant low for us. Now we will see all the green candles. So we call this a high point.
[06:37] Now after this, we have a red candle here. No. So we will call this red candle's low as a higher low.
[06:49] Now I told you that it should be broken by the green candle. So as you can see, when this high was broken here, Now after this, whatever red candle comes, Our higher low
[07:07] So as you can see, the price is going up and it put a high This was our first higher low. So as you can see, our trend is continuously forming here.
[07:23] So after this, when the price started going up, After this, the price went up again. After this, we got a new higher high here.
[07:38] And as you can see, this was our last higher low. Change of character.
[07:50] All of them, what do we call them? So here, for the first time, it has done a change of That is defined on the change of character.
[08:05] First, let me explain it to you theoretically. And we are going to see a lot of examples of this. basic trend.
[08:18] Give me a new slide. Our concept says that a pattern of higher highs and higher So let's say we see a pattern of higher highs and higher
[08:31] I put a line on it. Now what did the price do after this? It showed you that the character has changed.
[08:46] And it put a new high here. Most of us go to short here. It put a new high here.
[09:01] From where it reversed, Here we will mark the last red candle. Who? We will mark the last red candle as our demand zone.
[09:15] As our demand zone. So this will be our demand zone. We will try to buy here.
[09:30] From where it fell, Here this is the basics of SMC. There are some modifications of it.
[09:45] See SMC is basically an extension of Dow theory. You will get good trades in SMC. But you will see, 4 out of 10 are going well.
[09:59] guarantee of profit every time. It doesn't work like that. However, there are some modifications to it where 4 out of reach there.
[10:13] end, so understand the concept and wait a little so that we So here we will see how to buy at this point, now what happens is that sometimes the price does not come on the
[10:28] last red candle, it reverses from this place, so now we Here, we'll be using the Fibonacci tool to draw from this
[10:43] point to that point. This will show us the 0.786 level. If the price reaches 0.786, we can see it as a demand zone and make a purchase at that point. We'll buy here, and then
[10:58] apply a stop loss. It's pretty straightforward. Like I mentioned earlier, it's similar to the last red candle. So, you can set a stop loss with a 0.1% buffer from
[11:12] the last red candle. This will result in a very small stop If you see a wick on the red candle, set your stop loss very small. As the price goes down, it's like a touch and
[11:30] go situation where it touches and the candle goes up. Apply up, the touch and go situation, Why it will happen, that is also under SMC concept, when
[11:45] you will see it live, you will understand that touch and go is super important, because you will get the trade and some As they mentioned, the reversal happens quickly from the
[12:00] top, so the stop loss (SL) is small while the targets can be high, like 1:5 or 1:10. Therefore, SL is definitely small. You should have understood the strategy by now, so
[12:14] Let's take a look at the chart and analyze several examples. We're currently exploring SMC's initial level concept, but there's still much more to cover. So, here's a
[12:27] Heiken Ashi chart. I'll begin by identifying the trend and When the market faked out and then made a new high, you can
[12:40] see that there was a trend. I'll mark the higher lows here, which are the lows of the red candles, and in between those As you can see, there was a trend here. Let me show you
[12:59] where it faked out and then made a new high. I marked the higher lows with the red candles and the higher highs in
[13:11] As you can see, the price reached a new low. Now, I'll draw break this point. Once it breaks, the last red candle will
[13:23] I've marked all the higher lows for you, and the last between these two will act as a demand zone for me, so as
[13:37] you can see, I will move it a little for you, this red candle is at the bottom, so it will act as a demand zone I'm going to mark this demand zone. The whole candle here
[13:53] will act as a demand zone. The price made a new high here, then gave a fakeout, and then made another new high. When buying it here.
[14:06] So, my target here will be the high that it previously reached. For my stop loss, I'll place a buffer below the last red candle, specifically a 0.1% buffer. That will be
[14:18] my stop loss. As for my target, I'll aim for the high that it previously reached in this demand zone. But one thing is important here, now you are looking at the
[14:30] it in 5 minutes, it is possible that someone will see it in be achieved, if you are doing intraday, then in a short
[14:42] at 1 hour, then it is not necessary that it will be same time frame, then it 20 days, so here there is a small trick
[14:57] top, so let's measure two things here, so count the candles from here, I can see it equally, but it is important to
[15:09] other examples that recovery It means that the recovery will be little faster, it will
[15:21] take time from half, for example, if the price came down in 2 hours, then it will go up in 1 hour, and there is no such thumb rule that if it comes in 2 hours, then it can go up
[15:33] 2 hours, or if you are looking at the short time frame, if the price came down in 15 minutes, then it can go up in 7 The risk to reward ratio is not favorable here, so let's
[15:47] calculate both. As for the price, it went up and hit the demand zone after 20 bars. Keep in mind that the price can fluctuate rapidly, so it's important to stay vigilant.
[15:59] Now, when it needs to reach the target, it may take around 10 to 20 bars, as you mentioned. So, if I measure it from this point and take it up to the target, it has already
[16:11] taken almost 20 bars. This way, you can plan your trades strategies in the option your trades accordingly. Each bar represents one hour, so
[16:26] to others can be very helpful. Let's calculate the risk to so let me take the long tool from here, and our trade is
[16:38] executed on this point, and as you can see I need a little buffer from here, and here I have to target up, so as you can see, you got a risk reward of almost 3.5, 1 is to 3.5,
[16:51] 3.8, so you have got a trade above 1 is to 3, this is a one concept of SMC, so we are not yet over, so let's continue, so how can your trade be enhanced, so we will know about
[17:04] that, so for that we have to apply the concept of fair tell you what is fair value gap, and then we will see if See, the way to explain SMC can be different, you can find
[17:20] ways, but one thing is universal in this, which is coming gap, I said the way to The way of explaining SMC can vary, but you might find our
[17:35] crucial aspect is the fair value gap. Let's delve into it. explain it in a practical way, let's imagine we have three
[17:49] candles here: one at the bottom, one in the middle, and one at the top. Understanding this concept is crucial, so pay that fair value gap will be in the middle of 3 candles,
[18:02] candle 3, we don't care about the color, I have put a line number 1 and number 3, if we say shadow, it will be green,
[18:15] Let's make it green so people can remember that this is our green candle. It's important to note that if the candle is doesn't matter, so we only need to focus on candles 1 and 3.
[18:30] was mark the high of the first candle and the low of the third candle. Now you can see the gap in the middle, which we call the fair value gap. This is important to note, so
[18:45] like you are trading and you put order in bulk, institutions. We need to clarify the concept of smart money money refers to those who trade in bulk, not you and me.
[19:03] smart money is big people, who have a lot of money, I like to explain this, so I took some time, so what is the Check out what happened here - the price started moving
[19:17] from this point and then continued to rise. As it was moving up, a candle was formed, followed by another one. When this candle was formed, the price suddenly shot up.
[19:29] buying shares at that point. For instance, they might have to purchase goods worth 10,000 crores.
[19:41] an order to buy at a specific price. When the price reaches that level, it means that there is a buyer in one market and a seller in another market. So, he has to buy at that
[19:56] that you have to buy a share at the rate of 1000, but now 1005. at the rate of 1010, if the price goes up, then he says
[20:10] orders which were at the rate of 1000, they were left Now because it is not one order, it is such a big quantity of order that if the price falls from here, then that order
[20:25] will be executed and because that order will be executed, then the price will come here, make a wick here and boom up. pending orders at the rate of 1000. If the price falls from
[20:39] rise rapidly. This will trigger buying momentum and push Many people's S.L.s start getting hit by that momentum and S.L.s, the price runs up from double speed to 2x speed and
[20:56] The smart money concept, if you want to understand, then The pending order that is being executed is still in the listening now.
[21:10] The big players are doing this that if it comes at this So put it and leave it. Institutions have put it and left it.
[21:22] So when you see the price drop to this level, there will be Alright, as sir just explained, the reason why the fair waiting to be filled.
[21:38] the fair value gap. and modern. come on the fair value gap, it will go up, but the price
[21:52] So what happens is that the institution will earn money in So whenever you are finding the demand zone, then always Even if the fair value gap is small, it can still improve
[22:07] your trading and increase your chances of success. sure that the demand zone is below the fair value gap.
[22:19] See, sometimes what happens is that the price runs above The fair value gap affects the price and as they mentioned,
[22:31] Nothing can be permanent. No, a period will come and it will give money for a year destroy people.
[22:45] say that it is not going on. If you are getting to know something, then you understand Today you want to learn the smart money concept, we are
[22:59] This has been going on for a long time. If the market is dynamic, then we will have to be dynamic. So the idea here is that the market is now trapping people
[23:13] It is not that we are telling you that you understood and We want you to understand the concept that how it works and So if the market traps you, then it is not like that.
[23:28] As you must have heard from someone else, I told you person told you, whoever told you, there are a lot of
[23:40] Why didn't it work? The reason is that the market is Because the market is getting adaptive. Now what is here is that the demand zone can be lower.
[23:54] Let's say you have to trade in two lots. lot, being mindful of the demand zone to potentially catch No changes needed, the translation is already contextual
[24:08] You still have the same target, but what happens if it hits your stop loss? If you set your stop loss a bit lower, you But from where it can start running again, you will
[24:21] Someone had told that there can be a demand zone below the And why is this? Because they told you that institutions Its concept is that buying is cheaper.
[24:34] So buying low strategy they also follow and there they can For you too, smart money can play with your money.
[24:47] So you need to grasp a basic concept here - everything is Maybe you are getting good trades from here. happens from here.
[24:59] So here we have understood the concept of the fair value So now we go to the chart and tell you some things.
[25:11] What I want to tell you is that once you understand the SMC concept in this video, we will provide you with a shortcut fair value gap on your chart.
[25:24] It will be easy for you. Watch this video till the end. We Okay, so as you can see here, there are 3 candles. Here I This is candle number 1 on which my mouse is on.
[25:37] So now what I will do is that I will mark candle number 1 So the gap that you are seeing here, this gap is basically And where is our demand zone? It is below this.
[25:51] So now the chances of it going up have increased because we Now because of this, we can be confirmed that some people Okay, I agree that some people might have given S.L.
[26:06] But this is the trap that is put for you. After which the price will shoot suddenly. As sir told you, from half to the middle of the time, you
[26:19] So here also something similar happened. So there is one more thing in this. Many people say that I
[26:31] If you can forget about that for a moment and agree to buy above the fair value gap, you should know that you might But we know the target of a clear cut that how far the
[26:46] It has filled the fair value gap and it is going up from So you can also take an entry. If you want to hold the bottom, then the risk will increase
[27:00] As you said, this can also be an idea for you that the When it starts going back above it, then you buy it. And in order to catch it exactly, you will see that I have
[27:13] I have come to the fair value gap, I have taken it, but So the heartbeats of the people There are multiple technical things that you must be
[27:26] It was not that you did not understand and that support was But since you are grasping a new concept, if you implement But here is one thing that people will say that what will
[27:43] So that SL can be big, but a confirmation can increase. So it is for people here that if they understand that let's
[27:56] Now look, SL is getting bigger here. concept is that it has fallen below the fair value gap of Look at the demand zone, this candle opened here and it
[28:11] And if it is falling, then people must be afraid that it And here suddenly the price has shot up. It was open here, it hit low here and then it was closed up
[28:26] So this is the thing that touch and go comes. It's crucial for you to grasp what your trading strategy, style, and personality permit.
[28:40] I will show you on Nifty and we are going to keep the time So I will put the chart of Nifty here. Now as we learned earlier that we have to put high and I
[28:55] So let's try to mark the demand zone here. As you can see, there was a low here. Then there was a low here for you.
[29:11] You can see that there is a pinpoint marking here for you. Now after this, you can see that it broke this low.
[29:26] But it went and put a new high as you can see. So this point, the last red candle here, So now I will mark it here as our demand zone.
[29:43] Now this is our trading part. And as you can see from above, the price came down. Now here you can see a lot of patterns.
[29:58] So this is the place where you can see candlestick pattern Has given its target here Price has gone to its target here And you can see how small
[30:14] And our target is almost 1-3 If we see according to those 3 candles then people will So let's come to the candlestick part
[30:27] This is our candle no.1 I believe this candle no.2 is red
[30:39] So I can ignore it So I have marked low of candle no.3
[30:51] And our demand zone is below this Price has shot up so fast from here
[31:03] And this is the current situation in Nifty So this is our So as sir told you that you don't need to mark And an indicator will do all your work So let's see the
[31:16] And see where it will mark your gaps So let me remove these concept So we need to type in "smart money concept". Once we do
[31:31] that, you'll see Luxelgo appear on the screen. To use this indicator, Luxelgo is the one you need to select. Just tap on it once and you'll see the gaps here.
[31:47] These gaps are recent ones. I have told you all the characteristics Charge means change BOS means breakout of structure
[32:00] So you don't need to see much here So as you can see demand So you have to use another indicator for fair value gap And you have to wait for it So if you wait for it then
[32:16] So let's put an indicator for fair value gap So if you type fair value gap So you will see space man BTC
[32:29] You have to put an indicator for it So if you put it here So this is fair value gap but basically demand zone is here So if price comes again on fair value gap
[32:45] Then this pink color section will be removed Means fair It is not filled yet that's why it is open Price will come down and it can go up
[33:00] So demand zone is an important place for you Which you can understand What is BOS and CHO CH
[33:16] What does SMC work We have tried to explain
[33:28] You can watch it many times on internet And if you take some time then you will understand Then comment below
[33:44] If you want advanced videos then comment below We will try Because I have seen many basic concepts on my channel
[33:56] So we try to make basic videos You can write your city name We will meet you in next video If you're new to the stock market, you can follow along
[34:13] step by step and find the links in the description. You can earn money by refer and earn Subscribe this channel
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