[00:00] and Smart Money Concepts, or SMC in short,&nbsp; is one of the dumbest things I have seen. Unfortunately, Smart Money Concepts&nbsp; has a blind mob-like following. So,&nbsp;&nbsp;
[00:14] if you tell SMC traders that they are wrong,&nbsp; you might get kidnapped and thrown off a bridge. But you guys bullied me into making this&nbsp; video, and SMC traders are wrong. The only&nbsp;&nbsp; reason I was delaying this video is because,&nbsp; even if Smart Money Concepts are mostly crap,&nbsp;&nbsp;
[00:29] no one was getting hurt. But I was wrong. I&nbsp; saw multiple Patreon supporters get confused&nbsp;&nbsp; by SMC because it's advertised in a very&nbsp; misleading way. Look at this Reddit user,&nbsp;&nbsp; for example. They think SMC is different&nbsp; from Price Action even though it's not.&nbsp;&nbsp;
[00:44] Since I traded Price Action Only for&nbsp; thousands and thousands of hours,&nbsp;&nbsp; when I first heard about Smart Money&nbsp; Concepts, my reaction was something like this.
[00:59] I bet most price action traders also&nbsp; had a similar reaction because SMC&nbsp;&nbsp; really is just classic price action&nbsp; rebranded as an overcomplicated thing. At one point, I even saw someone&nbsp; say Smart Money Concepts came first,&nbsp;&nbsp;
[01:12] and Price Action traders copied them. It's&nbsp; true that Smart Money Concepts have existed&nbsp;&nbsp; for more than 10 years now. The earliest Smart&nbsp; Money Concept Post I could find was from around&nbsp;&nbsp; 2010 on a site called Babypips. But even on&nbsp; this site, experienced traders were quick&nbsp;&nbsp;
[01:27] to point out that it's just classic price&nbsp; action with a different name. That's because&nbsp;&nbsp; Price Action Strategies have been seen in&nbsp; books published more than 50 years ago. Richard Schabacker's "Technical Analysis&nbsp; and Stock Market Profits" was published&nbsp;&nbsp;
[01:41] in 1932. This book is considered&nbsp; an influential work in the price&nbsp;&nbsp; action field. It shows various patterns&nbsp; and market indicators and shows how to&nbsp;&nbsp; analyze price movements without&nbsp; the use of additional indicators.
[01:54] The price action technical analysis that we are&nbsp; more familiar with today became more popularized&nbsp;&nbsp; from around the 1970s onwards. That was way before&nbsp; most Smart Money Concept traders were born. So,&nbsp;&nbsp;
[02:06] no, Price Action did not copy the Smart Money&nbsp; Concepts; it's most likely the other way around. According to this Reddit user, it's clever&nbsp; marketing. If you name something a price&nbsp;&nbsp; action trading course, no one will buy&nbsp; it nowadays because people already know&nbsp;&nbsp;
[02:19] it. But renaming the courses to Smart Money&nbsp; Concepts and other dumb things makes millions. But why do some SMC traders strongly&nbsp; believe it's different than price action? I spent hours gathering data and found that&nbsp; many beginner traders who started trading&nbsp;&nbsp;
[02:35] after the year 2020 had a higher-than-normal&nbsp; chance of stumbling upon Smart Money Concepts&nbsp;&nbsp; instead of Classic Price Action. This is&nbsp; because SMC, like many other concepts,&nbsp;&nbsp; gained more attention when interest&nbsp; in trading increased overall after&nbsp;&nbsp;
[02:51] the lockdowns. Even your neighbor's dog&nbsp; was day trading during this time. Then,&nbsp;&nbsp; more people started remaking SMC&nbsp; videos, resulting in more attention. They explained Smart Money Concepts&nbsp; as if they show something smart,&nbsp;&nbsp;
[03:05] But do you remember when you were 3&nbsp; years old, new to the game of life,&nbsp;&nbsp; and believed Santa was real? Pull his beard,&nbsp; kid; it's the same grandpa you see every day.
[03:18] Just like that, when we are new to the game of&nbsp; trading, we believe many things trading gurus&nbsp;&nbsp; tell us. We draw stupid lines everywhere because&nbsp; we lack trading experience, and everything looks&nbsp;&nbsp; like support resistance to us. This same lack&nbsp; of trading experience can make many beginner&nbsp;&nbsp;
[03:34] traders believe that some of these drawings&nbsp; show smart things, like mentioned in Smart&nbsp;&nbsp; Money Concepts. Once you gain enough experience,&nbsp; it becomes very clear that most of these patterns&nbsp;&nbsp; are total crap made up by your mind, and the&nbsp; rest are all classic price action patterns.
[03:49] But then why do some traders say that Smart&nbsp; Money Concepts work for them? It's simple!&nbsp;&nbsp; Since SMC traders are just trading&nbsp; the classic price action, in the end,&nbsp;&nbsp; it's the classic price action that's working&nbsp; for them. If you name your boat a plane,&nbsp;&nbsp;
[04:04] This makes SMC sound good, but remember,&nbsp; the whole problem with SMC is that it is&nbsp;&nbsp; hurting some beginner traders because&nbsp; of the unnecessarily complicated names&nbsp;&nbsp;
[04:16] used. Calling a car "a car" is much easier to&nbsp; understand than giving it a misleading name. Meet this Reddit user who spent 4 months&nbsp; studying Smart Money Concepts. Let's call&nbsp;&nbsp;
[04:31] trading strategies and found many people making&nbsp; profits with SMC. But that's not the main thing&nbsp;&nbsp; that got their attention. It was the higher&nbsp; accuracy analysis SMC traders were doing.
[04:44] Then, Bill found more people who claimed to&nbsp; have made money with SMC. After looking at&nbsp;&nbsp; all these positive reviews, Bill decided to&nbsp; try it! Even though Bill struggled initially,&nbsp;&nbsp;
[04:56] But most importantly, Bill felt like&nbsp; a blindfold was removed and they were&nbsp;&nbsp; seeing how the markets really moved for&nbsp; the first time. It was like, "I understand&nbsp;&nbsp;
[05:08] every movement now." That was the case until&nbsp; they gained 4 months of experience with it. realised Institutional Orderflow was oddly&nbsp; similar to just regular trend trading.&nbsp;&nbsp;
[05:23] Institutional Sponsorship was pretty much&nbsp; just strong levels of Support Resistance. Terms like "Internal External runs" were just&nbsp; sudden price moves and pullbacks in lower&nbsp;&nbsp; timeframes. "Low resistance liquidity runs,"&nbsp; which are the soul of Smart Money Concepts,&nbsp;&nbsp;
[05:40] Then, Bill did some more research&nbsp; and realized that most of the Smart&nbsp;&nbsp; Money Concepts are truly normal&nbsp; concepts with different names.
[06:10] "Breaker Blocks" are literally just support&nbsp; turning into resistance. They also found&nbsp;&nbsp; how toxic the SMC community is. They saw&nbsp; how strongly some people believe in the&nbsp;&nbsp; smart money concept like it's a secret thing&nbsp; only they know. The community also doesn't&nbsp;&nbsp;
[06:26] like when people point out they are wrong&nbsp; and when others use different strategies. patterns even though they themselves&nbsp; use the same thing with different names.
[06:41] Bill thinks that if you show a chart to an SMC&nbsp; and a normal price action trader at the same time,&nbsp;&nbsp; they both would likely take the same entries,&nbsp; but a normal price action trader will call it&nbsp;&nbsp; a "bullish engulfing entry at support", and an&nbsp; SMC trader would say, "they saw institutions&nbsp;&nbsp;
[06:56] manipulate equal lows grabbing liquidity to&nbsp; fill their orders followed by a propulsion&nbsp;&nbsp; block that creates displacement and returns to&nbsp; fill remaining orders and reach for liquidity."
[07:09] I know some of you guys had a positive&nbsp; experience with SMC and are ready to&nbsp;&nbsp; say how wrong this Reddit user is. But I want to&nbsp; show you that you are most likely profitable with&nbsp;&nbsp; smart money concepts because you yourself have&nbsp; become smarter than when you started trading.
[07:24] Most of us agree that more than 60% of&nbsp; trading success is based on psychology,&nbsp;&nbsp; money management, etc. The entry strategy&nbsp; and concepts like these play very little&nbsp;&nbsp; role in your profitability. In&nbsp; the beginning, most of us don't&nbsp;&nbsp;
[07:38] really have any clue what's important. But&nbsp; over time, with more trading experience,&nbsp;&nbsp; you slowly get your trading psychology and money&nbsp; management right, resulting in better results. It doesn't matter if you start with classic&nbsp; simple price action or complicated smart&nbsp;&nbsp;
[07:53] money concepts. As long as you get&nbsp; better at the trading psychology part,&nbsp;&nbsp; But if you start with something good and simple,&nbsp; that profitability point in your trading journey&nbsp;&nbsp;
[08:05] might come much faster. If you start with&nbsp; something unnecessarily complicated, it might&nbsp;&nbsp; take a while to figure out that complicated thing,&nbsp; pushing the profitability point further away.&nbsp;&nbsp; I'm oversimplifying here, but it doesn't make any&nbsp; sense to use unnecessarily overcomplicated things.
[08:21] So, before starting to write this video, I&nbsp; was going through as many different views on&nbsp;&nbsp; SMC as I could. One of the posts I found was&nbsp; from a so-called Million Dollar Trader and&nbsp;&nbsp;
[08:33] Number 1 Forex Trading Coach. I'm not&nbsp; sure about the number one Coach part,&nbsp;&nbsp; but he claims to run a trading firm.&nbsp; Anyway, what I found interesting is that,&nbsp;&nbsp; even though he is teaching Smart Money&nbsp; Concepts here, his first line literally says,&nbsp;&nbsp;
[08:47] "SMC is price action by a different name." Then,&nbsp; he goes on to say that even though SMC traders&nbsp;&nbsp; use foreign names like "liquidity grabs" and&nbsp; "mitigation blocks," it's basically the same&nbsp;&nbsp; thing people have already been using for a&nbsp; while now. If more people taught SMC with a&nbsp;&nbsp;
[09:03] neutral view like this, I bet beginners wouldn't&nbsp; be confused and think that it's something new. Some SMC traders are probably thinking, "I'm&nbsp; being too harsh on Smart Money Concepts. If I&nbsp;&nbsp;
[09:17] just try learning it properly, I would see&nbsp; how less complicated and smart it is." So,&nbsp;&nbsp; I gave SMC trading a serious&nbsp; try, and here's what happened. They look at 3 things before entering the trade.
[09:32] Step 1 in the Smart Money Concept entry is&nbsp; to identify the trend of the market using&nbsp;&nbsp; the Higher Highs and Higher Lows Price Action&nbsp; Pattern. I don't see anything wrong with this,&nbsp;&nbsp; actually, because they are just saying to use&nbsp; classic price action to identify the trend.
[09:46] But then, in step 2, they say to Identify Key&nbsp; Order Block Zones from the Smart Money Concepts&nbsp;&nbsp; because these zones are areas with a significant&nbsp; imbalance between supply and demand. On a chart,&nbsp;&nbsp; the order block looks like this. And this is&nbsp; where every price action trader says, "Hey,&nbsp;&nbsp;
[10:02] I have seen this one," because it's been called&nbsp; a simple resistance area for more than 50 years. The third step is to basically take a short trade&nbsp; when the price comes in this order block zone. So far, from a price action perspective, Smart&nbsp; Money Concepts has said to wait for the price to&nbsp;&nbsp;
[10:18] come inside a resistance area in a downtrend.&nbsp; Other than the unnecessary order block word,&nbsp;&nbsp; it's simple. But then it said&nbsp; something really interesting.&nbsp;&nbsp; "A Strong Low is The Low that Causes&nbsp; Manipulation and Break Structure."
[10:36] I was super confused by this line. What&nbsp; Manipulation are you talking about? I&nbsp;&nbsp; scrolled down and saw this chart. But&nbsp; still couldn't see the Manipulation. from a price action perspective, all&nbsp; I see are basic swing highs and lows.
[10:51] If you are wondering what this BMS word is,&nbsp; it just means a normal breakout. It's one&nbsp;&nbsp; of those things that is used to trick new&nbsp; traders into thinking it's something new. Then Smart Money Concept said that this swing&nbsp; high in a downtrend is a strong resistance.&nbsp;&nbsp;
[11:04] And this swing low in an uptrend is&nbsp; a strong support. But based on what&nbsp;&nbsp; I have learned by trading price action&nbsp; in the live market for around 8 years,&nbsp;&nbsp; this just looks wrong. Pullback Swing&nbsp; lows like these are actually weak support&nbsp;&nbsp;
[11:17] because they are often not visible on&nbsp; higher timeframes in a good uptrend. So far, Smart Money Concepts has&nbsp; not said anything smart. In fact,&nbsp;&nbsp; I would argue that it said some things really&nbsp; dumb. But things got even dumber. Because it&nbsp;&nbsp;
[11:30] said that if the price makes this pattern, it's a&nbsp; weak low. But wait a minute, if I put the previous&nbsp;&nbsp; smart money drawing next to it, didn't it say&nbsp; this pullback swing low was strong? And now,&nbsp;&nbsp; it's saying if the price breaks below that&nbsp; strong support to give a bigger pullback,&nbsp;&nbsp;
[11:46] the new swing low is a weak support. That&nbsp; doesn't make any sense. How is the smaller&nbsp;&nbsp; pullback in a trend a strong swing low, and a&nbsp; bigger pullback in the same trend a weaker low? There was no reason given behind this smart logic.&nbsp; But I think this Smart Money Concept is guessing&nbsp;&nbsp;
[12:01] that if the previous swing low is broken in an&nbsp; uptrend, it can be the start of a new downtrend,&nbsp;&nbsp; which could look like this in the future. In&nbsp; that case, the swing low can be weaker since&nbsp;&nbsp; swing lows are usually weaker in a downtrend.&nbsp; But what if the price does this instead? So,&nbsp;&nbsp;
[12:17] this pattern is not a clear confirmation&nbsp; of a downtrend. From my experience,&nbsp;&nbsp; it mainly means that the uptrend is slowing&nbsp; down. After that, the price could go up again,&nbsp;&nbsp; or sideways, or down. Nothing strongly says&nbsp; this should be a weaker swing low than the&nbsp;&nbsp;
[12:32] previous one, which SMC previously&nbsp; said was strong for some reason. There is another flaw in the SMC logic. If&nbsp; the price gives a bigger pullback like this,&nbsp;&nbsp; previous one. If more people can see it, then&nbsp; more people can react to it. For example,&nbsp;&nbsp;
[12:50] when the price comes near it again, they can&nbsp; buy, calling it a support trade. In other words,&nbsp;&nbsp; this bigger swing low that Smart Money Concepts&nbsp; said is weak can actually act stronger.
[13:04] While showing how to take a short trade&nbsp; near a simple resistance, SMC not only&nbsp;&nbsp; rebranded the same things into confusing&nbsp; names, but it also made up nonsense logic.&nbsp; To be fair, the Classic Price Action&nbsp; also contains a lot of bad logic,&nbsp;&nbsp;
[13:17] but it's far less compared to SMC's logic.&nbsp; Price Action is also much simpler to understand. Is it possible that since I started as a Price&nbsp; Action trader, everything I'm saying is biased?
[13:32] Maybe! But I spent over around&nbsp; 3 weeks researching this topic,&nbsp;&nbsp; taking different views into account, and still,&nbsp; Smart Money Concepts looked like a rebranded,&nbsp;&nbsp; unnecessarily overcomplicated&nbsp; thing with a lot of nonsense logic.
[13:46] The funny thing is that we retail traders,&nbsp; people who trade on their own accounts,&nbsp;&nbsp; create very low volume in the market most of&nbsp; the time. Big banks and other institutions on&nbsp;&nbsp; the other hand, buy sell in quantities that are&nbsp; way bigger than ours. But according to SMC logic,&nbsp;&nbsp;
[14:08] Now I agree, sometimes retail traders&nbsp; create positions that big players care&nbsp;&nbsp; about. But most of the time,&nbsp; no one gives a crap about us.
[14:20] This Reddit user said it in a rude but&nbsp; funny way. SMC traders do not trade like&nbsp;&nbsp; a bank. They do not trade differently&nbsp; from any other retail trader. They are&nbsp;&nbsp; not doing anything worldbreaking.&nbsp; They are trading basic price action&nbsp;&nbsp;
[14:38] I have used in my 8 years of trading journey.