Greatest Smart Money Concepts Indicator (In-Depth Tutorial)

[00:02] smart money concepts indicator which became so popular that it now ranks within the top 10 indicators of all time on Trading View. By taking the most essential parts of smart money concepts, traders can finally perform analysis on

[00:15] market structure, order blocks, and liquidity concepts with a single indicator that is completely free and open- source. Today, we'll break down exactly how this gem works, and at the end of the video, show you the best

[00:28] features and setups to use in real markets to easily outsmart dumb money. Oh, you almost had it. You got to be quicker than that. At the foundation of this indicator is market structure. Structure is used as an easy way to

[00:40] detect trend changes and validate existing ones using price action. In an uptrend, the market makes higher highs and higher lows. But if a higher low point is broken, a red ch label which stands for change of character is

[00:52] plotted and this tells us the market direction has changed. However, if point, the previous higher high point is broken, it signifies that the market trend is continuing and a BOS label which stands for break of structure will

[01:06] be plotted. These labels are called realtime internal structures. However, these internal structures often exist within larger ones. If you zoom out, you'll see larger solid lines representing swing structures. These

[01:19] internal ones, but can be used to determine how significant a directional change may be. For example, you can have an internal bearish change of character created. But if it's within a larger bullish swing structure, it could be a

[01:33] sign that the trend change might not be as significant, and you may want to be cautious if holding trades for a long time in that direction. In addition to structure, the indicator can also detect equal highs and lows and major price

[01:45] points such as daily, weekly, and monthly levels. Traders will often use these levels together to locate areas of resting liquidity. In this example, an equal low is detected, suggesting that the price is struggling to go lower.

[01:58] Now, we can see that the price then swept that daily low, which might have It's then followed by a change of character at which point could then be traded into this order block above. Which also brings us to the next major

[02:11] part of this indicator, order blocks and fair value gaps. Order blocks are areas buying and selling activity. And when the price returns to these levels, there's often a strong reaction. The indicator will show you bullish order

[02:25] blocks in blue and bearish in red. And you can use these areas to take profit or exit your trades. Just like with market structure, you can detect more significant blocks by enabling swing order blocks. A trader may choose to use

[02:37] internal order blocks to enter trades and more significant swing order blocks as areas to exit. Fair value gaps can also be enabled and these are imbalances filled. Price will gravitate towards them and they're often used to find more

[02:51] precise areas within a retracement to enter a trade. The indicator also includes a premium and discount feature which can help detect regions of supply and demand in the market. So, if you're thinking about taking a buy trade, but

[03:03] the price is above the equilibrium, you may want to wait for a pullback to the you from getting stopped out in the retracement. These are the major of these features can be adjusted so traders can find just the right fit for

[03:17] their trading style. Since the release of this indicator, we've seen tons of videos and users attempting to use it by blindly taking trades at change of characters or break of structure points. If you blindly execute at these levels,

[03:30] you will inevitably fail as a trader. Traders are supposed to use this tool complimentary indicators before executing any trade. So, with that said, let's explore some of our favorite trade setups using this indicator. In this

[03:43] example, notice how the price is currently bearish. We know this from a bearish break of structure label. However, if we zoom out, we also see This could indicate that the current internal structure change may be a

[03:58] retracement of a much larger move. But if it is a retracement, when and where is it likely to reverse and continue bullish? Let's perform some volume analysis on this entire structure to determine that. Now any volume profile

[04:11] tool will work. But this volume tool not only shows where the most volume is but also whether traders have more bullish or bearish sentiment within that region. This indicator is the money flow profile and it's completely free. Now we see

[04:23] this price level. And also notice how there is significantly more bullish sentiment within that price region. Now as price trades into this level, we don't just execute, we wait to see its reaction to that level. And now that

[04:36] we're seeing larger bullish candles rejecting this level and also notice low, we now have quite a number of reasons to expect a bullish move from this region. In this other example, notice how the structure is bearish and

[04:49] the price has retraced into the swing order block. Now, if we enable premium and discount zones, we can see the price is above the equilibrium, which is where you want it to be for sell trades. We also see that there was a bearish equal

[05:01] high plotted, which is the first sign of a possible reversal. If we now enable fair value gaps, we can set a limit order at that fair value gap since the structure is still bearish to get an amazing sell trade. The smart money

[05:13] available for free on five different platforms. If using it on Trading View, a common issue with this indicator is that when candle coloring is enabled, it only changes the colors if the indicator is selected. An easy way to solve this

[05:27] candles in the layer panel. This issue was fixed in the premium version of this indicator. the price action concepts toolkit. We also improved the order blocks to provide volutric data, multi-time frame order blocks, trend

[05:40] lines, chart patterns, several different types of imbalances, and much more. This version of the indicator is constantly updated as we integrate new features based on user feedback, and you can try it for 30 days at luxalgo.com.

[05:53] We hope you enjoyed this video and now have a better understanding of how to to this indicator for free within the Luxalgo library by searching Smart Money what indicator you would like us to cover next. And don't forget to join our

[06:08] Discord community to provide feedback. Thank you for watching and until next Thank you for watching and until next time.