Smart Money Concepts Indicator Review — Full Breakdown & Transcript

[00:01] is the most popular indicator on TradingView with over 138,000 boosts. This is LuxAlgo's Smart Money Concepts indicator and it's crazy.

[00:14] Instead of just giving you one simple signal or one basic overlay, this thing basically turns your entire chart into a full Smart Money Concepts suite. It shows market structure, order blocks, equal highs and equal lows, fair value

[00:29] gaps, premium and discount zones, and a lot more directly on your chart. And that's why so many traders use it. SMC can get really complicated super fast where structure is shifting, where liquidity is sitting, where price might

[00:45] react, which order blocks really matter, and whether a move is just a sweep or a real breakout. And if you're trying to do this all manually on your chart, your chart can get messy fast. This indicator automatically maps out everything for

[01:00] you in real time. So, you're not just sitting there manually drawing every single zone, level, and structure shift yourself. The first big thing you're going to notice is market structure. You'll see two labels on the chart,

[01:13] choch, which stands for change of character, and BOS for break of structure. These labels are really important because it helps you understand if price is continuing in the same direction or potentially starting

[01:25] to reverse. For example, if you keep seeing break of structure labels means you have a bullish trend and you shouldn't be looking for shorts. character label, you should be looking for the reverse. So, you can see we had

[01:39] some consolidation around this area and then price just plummeted down. And on the flip side, if price keeps breaking lows and you keep getting bearish break of structure labels, you should be looking for shorts. So, for instance,

[01:51] once you get this first break of structure label, you can add a fib level, enter the trade at 0.5, and target the low. And that would be a 2.44 RR. Now, you will see for the market structure that there's dotted lines and

[02:04] solid lines. The solid lines represent swing structure, while the dotted lines represent internal structure. That just basically means long-term and short-term structure. So, we can see this long-term bearish break of structure, so we

[02:17] shouldn't be following a bullish change of character because we know long-term we are in a downtrend. Now, another huge part of this indicator is order block. A lot of smart money traders will use order blocks as potential reaction zones

[02:32] because they can show areas where strong buying or selling previously occurred. But, order blocks can be extremely subjective and it can get pretty confusing. So, this indicator will spot them for you and mark them on the chart.

[02:45] Bullish order blocks are going to be blue boxes, while bearish order blocks are going to be red boxes. So, like I said it before, we are in a bearish break of structure label. Price then formed a bearish order block along with

[02:58] a bearish change of character. What we can do is we can wait for price to retrace into the bearish order block, take the trade from there, stops above the order block, and then we can just target a one to two or the next order

[03:12] can be with this indicator. This indicator can also help you track where liquidity is resting. It'll show weak highs and lows, strong highs and lows, equal highs, and equal lows. For example, we just got three equal low

[03:28] labels in a row and we know we're in a bullish trend based on this break of structure label. We also just formed a bullish order block. So, what we can do is we can wait for the next break of structure label to appear. When that

[03:40] happens, we can enter a long trade. We can put our stop at the swing low and target a one to two. And again, it's that simple with this indicator. Now, another feature that's super important is fair value gaps. Now, we have all

[03:52] heard fair value gaps and trying to manually draw every single one on your chart gets to be tedious. Now, what's nice about this indicator is not only does it draw these fair value gaps in real-time, but instead of your chart

[04:04] looking all messy with all these fair value gaps, there's actually an auto threshold setting. And if you toggle that, it filters out the non-significant looking at the fair value gaps that actually matter. [music]

[04:18] time frames, like for example, right now I'm on the 5-minute chart, you can go into the settings and choose what time frame you want the FVGs to be based off of. So, I can go down and click the 15-minute FVGs, and now it'll only show

[04:32] chart. Once you combine all these features of the indicator, price gives you a much cleaner story because by itself, one fair value gap doesn't mean much, one order block doesn't mean much, and one break of structure doesn't mean

[04:47] much. But when all these things line up, that's where the real magic happens, meaningful. Now, another feature that I really find helpful is the premium and discount zones. It pretty much shows where price is trading within a range.

[05:01] sitting pretty close to the premium zone. So, we wouldn't want to buy at this area. I would only want to buy if we reach the equilibrium or below. And what's truly the most remarkable thing about this indicator is that every

[05:15] setting can be turned on or off depending on how you trade. So, maybe I don't trade order blocks all the time. I can simply turn those off and they'll disappear from my chart. You can change the colors of everything to better suit

[05:28] just makes everything feel less overwhelming. So, that's the rundown of the Smart Money Concepts indicator by LuxAlgo. And before we finish, I just want to mention something that's pretty exciting. This whole indicator can be

[05:41] built using LuxAlgo Quant. Quant is basically an AI that builds indicators using Pine Script, And it's a lot better than these other AIs because it was indicators. So, instead of using stuff like ChatGPT, Claude, or Gemini, which

[05:58] can lead to several errors and taking way longer than it needs to, you can head over to luxalgo.com/quant and build the indicators here. So, for example, you can type something like create an indicator that detects break

[06:11] of structure and change of character, highlights bullish and bearish order blocks, marks equal highs and lows as liquidity zones, detects fair value gaps, and shows premium and discount areas based on the current range. And

[06:24] Quant can build it in just seconds. And it really is a huge deal because these kinds of indicators can take forever to build manually. And to put this on your chart, all you would have to do is go to the code view, click copy, that copies

[06:38] TradingView, you'll see this little triangle down here, that's the Pine Script editor. You'll click into that, create a new indicator, name it SMC, chart. And now we have the entire indicator right on our chart in just a

[06:53] couple of seconds. So, if you want to check that out, I'll leave a link for Quant right in the description, as well as the Smart Money Concepts indicator. But overall, there is a reason why this is the most popular indicator on

[07:05] TradingView. It gives traders a full Smart Money Concepts toolkit in one place. But the key is to not treat it like a magic button. Use it as framework and look for the story behind price. Where is liquidity sitting? Has

[07:18] structure shifted? Did price create an imbalance? Is price returning to an order block? Are we in premium or discount? When you start combining all becomes a lot easier to read. Now, hopefully you found this useful, and if

[07:32] you did, make sure to like the video, subscribe, and let us know which indicators you want us to cover next. Thanks for watching, and I'll see you in Thanks for watching, and I'll see you in the next one.