Smart Money Concepts Without the Confusion (My Clean SMC Strategy)

[00:00] $100 a day from trading! Pocket change for some,  life-changing for others! If you stay till the   end, you’ll discover how to day trade using smart  money concepts, to hit this target every day!  

[00:14] I had no clue what I was doing. I thought fancy indicators   were the key to success. I just wanted to know the   trend and find a simple entry point! But I couldn't figure out which way  

[00:29] different time frames showed different trends. All changed when I ditched all indicators   and started reading market structure! This the foundation of everything we do!

[00:45] A bullish market is when prices keep going  up. You'll see higher highs and higher lows.  This means each time the price drops,  it doesn't go as low as before. 

[00:57] And when it goes up, it goes  higher than the last peak.  When price breaks through a previous  high, we call it a "break of structure".  This is a key moment. It shows  the market is getting stronger.  

[01:12] Now, real markets aren't perfect.  They don't move in straight lines.  That's why we need to focus on these swing highs  and lows. These are the big turns in price.  A swing low is the lowest  point that led to a swing high. 

[01:27] So, when you see a new high form, look back. The  lowest point before that high, is your swing low!  This might sound basic, but it's super  important and many traders get it wrong. 

[01:40] They zoom in too close and miss the bigger  picture. They might think the market is going   down when it's really still going up overall.

[01:52] the chart. You might see lower lows and lower  highs. You might think the market is going down.  But if you zoom out, you might see that  this is just a small dip in a bigger  

[02:04] upward trend. If you sell here, you will  lose money when the price keeps going up.  That's why it's crucial to map out  your swing highs and lows correctly.  

[02:16] It helps you see the big picture  and trade in the right direction.   In a bearish market, it's the opposite.  You're looking for lower highs and lower   lows. The highest point that led to  a new low becomes your swing high. 

[02:32] And, everything between a swing high and  a swing low is just "internal structure".  It's the small moves within the bigger trend.  Don't get too caught up in these small moves.  

[02:44] Keep your eye on the bigger trend. break of structure, always expect a pullback. This means after the price breaks through a  

[02:56] previous high or low, it will usually come back  a bit, before continuing in the same direction.  Many new traders make this mistake here. They see the price break through a level  

[03:09] and immediately want to buy or sell. But the smart move is to wait for the   pullback. This gives you a better entry point.

[03:21] lows. This concept can really boost your trading. A low's job is to make a high. A high's job is to   make a low. In a bullish market, we have a  series of strong lows. A strong low is one  

[03:33] that succeeds in making a higher high. If a high fails to make a lower low,   we call it a weak high. This is important for  setting targets. In a bullish market, we like  

[03:45] to buy at strong lows and target weak highs. Think about it this way: In a bullish market,   we're trying to catch higher lows. These are  the easy trades, the continuations. In a bearish  

[03:59] market, we're looking to catch lower highs. This concept gives you a clean framework   for mapping structure and setting targets.

[04:12] changes of character. A bullish market doesn't  last forever, and neither does a bearish one.  In a bullish market, we're seeing higher  highs and higher lows. But at some point,  

[04:26] price will break below a strong low and form  a lower low. This is where the trend changes.  Some traders want to see both a lower low and a  lower high before they confirm a trend change. 

[04:40] That’s because sometimes, what looks  like a trend change can be a fake-out.  The market might grab some liquidity  below a low and then continue up.  

[04:52] I like to keep it simple. As soon as I see that  lower low form, I consider it a trend change.  I then look for the lower high to form  so I can trade the new bearish trend. 

[05:05] This links back to our strong  and weak highs and lows concept.  When a strong low is taken out, it means a lot  of money stepped in to push the price down.  This creates a strong high. We can  use this to build our trade ideas. 

[05:21] The same applies in reverse for a  bearish to bullish trend change.  We look for that higher high, then try  to catch the higher low that follows.   They will often give false signals,  because we bet on a reversal. 

[05:39] A reversal is much harder  to spot that a continuation.  In a bullish trend, we look for that first  bearish change of character, to signal the   start of a pullback. Then we wait for a bullish  change of character to signal the end of the  

[05:56] pullback and the formation of a higher low. This approach works for both continuations   After the market structure, the next concept  you should master is supply and demand. 

[06:11] Supply and demand zones are key spots on  charts where big players make their moves.  These zones show where there's a big  gap between buyers and sellers.  

[06:23] To find them, look for quick, strong  price moves that suddenly reverse.  This shows a big imbalance  that made the price jump.  To mark these zones, find  where the big move started.  

[06:37] There are different types of zones to watch for. First are the base zones: These form when price   stays in a small range for a while, then  breaks out. The edges of this range are where  

[06:50] orders build up. When price comes back to these  levels after a breakout, it's likely to react.   We also have pivot zones: These form at key  turning points, like swing highs and lows. They're  

[07:05] often marked by one or two special candles. For a demand zone, look for a strong down candle,   where the next candle closes above its high.  This shows a shift from selling to buying. 

[07:19] For a supply zone, it's the  opposite: a strong up candle,   where the next candle closes below its low. there are two main types of zones: First are continuation ones:  

[07:35] This happens when there's a trend and price  pulls back before continuing. These are   called rally-base-rally zones in uptrends,  and drop-base-drop zones in downtrends.  

[07:48] The second type is reversal zones: This  happens when price changes trend direction.   These are called drop-base-rally  or rally-base-drop patterns.

[08:00] Supply and demand zones aren't random. They  show where buyers and sellers are most out   of balance. Big price moves often mean there was  a mismatch between buying and selling pressure. 

[08:14] The key is how long price stays  in the zone. When there's a big   imbalance, price won't stay long. It will quickly move up or down.  So, look for zones where price only stayed  for a short time before making a strong move. 

[08:30] The less time spent there, the more  out of balance supply and demand are.  This means a higher chance of a  good trade when price comes back.   Also focus on fresh zones  that haven't been tested yet. 

[08:45] When price revisits a zone, it can  use up some of the waiting orders.  This makes the imbalance less extreme. So, the more times a zone is hit,   the weaker it gets. That's why it's important  to know the difference between an untested  

[09:01] zone and one that's been hit a few times. The trading chances are very different. First, clear break of structure: Price  needs to make a strong move away from  

[09:17] the zone and break nearby swing highs or  lows. If price just hangs around the zone,   it might not be strong.

[09:29] This means there's liquidity in front of  the zone that could absorb moves against it.  For a demand zone, you want to see  buy orders stacked up in front.  This could be a swing low  or a consolidation pattern. 

[09:44] It shows traders are waiting to buy at that price.  If there's no liquidity and price just hits the   zone, big players might not get involved.

[09:59] look at these things: First, speed of price movement:   How fast does price move away from the zone after  it forms? Faster moves usually mean stronger   zones. Quick, big moves show a strong imbalance.

[10:19] price stay at the level before moving? Less  time often means it's a key turning point. If   price just touches a demand zone and starts  rising right away, it might mean big buyers  

[10:31] stepped in, and bought up all the supply. after hitting the zone? Bigger moves usually  mean stronger zones. If price barely moves,  

[10:47] it's not a good sign. But a long move in  the opposite direction after testing a   zone means it's probably important.

[10:59] when the zone forms. This shows there's  a lot of interest at that price, and big   players might be buying or selling there.

[11:12] zone cause a break in the market structure? Zones  that do this are usually stronger. It takes a lot   of money to break market structure, so these  zones are more likely to hold in the future.  

[11:26] So when you're trading with supply and  demand zones, remember these key points:  Look for explosive price movements. Find zones where price only stays   for a short time before moving sharply. Focus on fresh zones that haven't been tested yet. 

[11:45] Check for clear breaks of structure. Look for inducement in front of the zone.  And consider how fresh the zone is. Day trading is all about understanding how the  market moves. And one key concept is liquidity,  

[12:02] the amount of orders in the market. It's essentially how much supply and   demand exists at different price levels. Liquidity is what drives market movement.  

[12:14] Every day, millions of traders jump  in. Many use similar strategies.  Buyers, thinking the market will go up, buy at  support. They put their stops just below it! 

[12:27] Sellers do the opposite. They sell at  resistance and put their stops above the highs.  Then there are breakout traders! They  set buy and sell orders around the range. 

[12:39] All these orders create a lot of  liquidity on both sides of a range.   And why does this matter? Well, it helps  you understand how the market moves based on   supply and demand. It's not as simple as just  buying at support and selling at resistance . 

[12:57] You might see a trading range after a downtrend. Some traders, not knowing how   order flow works, might sell here. Others might try to buy. And there are still   stop orders and breakout trades on both sides . This is where big players come in. Banks and  

[13:15] hedge funds trade huge orders. They  need a lot of liquidity to do this.   Let's say a big institution wants to sell a  lot. They need to free up orders in the market.  This is done by triggering stop losses.  They might push the price up first,  

[13:32] hitting those stops, before selling big. areas of the chart. These are often popular  chart patterns that many retail traders use. 

[13:44] First ones are old highs/lows - significant price  points from the past that stand out on the chart.  These areas are like liquidity magnets. Traders  often put their stops just beyond these levels,  

[13:57] creating clusters of orders. Smart  money loves to target these clusters.   Major swings, double tops and bottoms,  or any pattern with equal highs or lows,  

[14:10] are prime liquidity areas. Other common spots are   triangles, wedges and flags . So when analyzing charts,   look for areas where significant buying or  selling orders are likely to be executed. 

[14:26] These often coincide with key  support and resistance levels,   breakouts, or areas of price congestion . liquidity zones. It’s all about recent  price pivots, the ups and downs in price  

[14:43] that stand out on a chart. A pivot low is a low point   with higher lows on both sides. A pivot high is the opposite - a high   point with lower highs on both sides.

[14:59] it's all about how traders think. If someone buys when the price is   going up, they often put their stop-loss  order just below the last swing low.  If they're selling when the price  is going down, they put their  

[15:12] stop just above the last swing high. This creates two types of liquidity:  Sell-side liquidity, where sell  stops pile up below swing lows.  And buy-side liquidity, where buy  stops gather above swing highs. 

[15:29] Big players in the market, the smart money,  love to hunt these areas. They place orders   to buy below the lows and sell above the  highs, hoping to trigger all those stops.  

[15:43] Now, let’s find the closest pivot  highs and lows on this chart.  We see a low point with higher lows on  each side - that's sell-side liquidity.  And here we spot a high with lower highs  on each side - that's buy-side liquidity. 

[16:01] As the market moves, these points change. When price breaks above a swing high,   that buy-side liquidity is gone,  and we look for the next one.  Same thing when price drops below a swing low  - we find the next sell-side liquidity spot.  

[16:19] Sometimes, you'll see multiple  swing points close together.  These create what we call "equal highs" or  "equal lows." They're like liquidity hotspots,   where lots of stops cluster together.

[16:37] levels you should always keep an eye on: First ones are previous week's high and low:   These are great for framing reversals  or as targets for price moves.  

[16:49] Second, previous day's high and low: These can  also frame reversals or act as price targets.   Session highs and lows: These include the high and  low from the Asian, London, and New York session. 

[17:07] These liquidity levels, plus the swing  pivots, give you a roadmap for the   market. They show you where big moves  might start or end. They're very useful   for planning trades within each trading day.

[17:25] They often set up trades around them. For example, if price is going up and   nearing a buy-side liquidity level, they might  get ready to sell. Because they expect a lot   of buy orders to be triggered there, which  could push price up sharply before it falls. 

[17:41] On the flip side, if price is dropping  towards a sell-side liquidity level,   they might prepare to buy. They're betting that  all those sell orders will create a quick drop  

[17:53] When you day trade, you should always aim to  take your trade from a discount and premium area.  Let's say you have a range. Or you have a break of structure,  

[18:07] and you mark the swing low that started  the move, and the end point of the move.  Mark this range from the low to the  high using the Fibonacci tool. This   shows the middle of the range, at the 50%  Fib level. We call this the equilibrium. 

[18:25] Anything above the 50% is at a premium.  Anything below is at a discount. Let's say you want to buy at the middle of  the range. If you put your stop at the low  

[18:37] and your target at the high, your risk to reward  is 1 to 1. But the deeper into discount you go,   the better your risk to reward gets. The same goes for selling. If you sell  

[18:50] at the middle, stop at the high, and  target the low, you have a 1 to 1 risk   to reward. But as you get deeper into  premium, your risk to reward improves.

[19:03] We're looking at crude oil. First, we find a  range. We have a swing low here, then price   moves up. We mark from this low to this high. Very important, ranges expand as price moves.  

[19:20] So as price goes higher, we move our  Fibonacci tool up too. We keep doing   this until we see a high form. Now, if we're looking to buy,   we want to find an entry in the discount zone. Do we have one? Yes, there's a demand zone here. 

[19:38] And as price reaches into that discount  zone, it moves higher from there.   Another range, from this high down to this low.  So we mark this one out. From here, we want to see  

[19:52] price reach into a premium of the previous range. We're looking for short positions, so we want   an entry in the premium zone. Looking left, we have a supply zone. 

[20:04] Price reaches into here, into a  premium, and rejects the zone. If you want to succeed in day trading,  you also need to master inducement.  Inducement is simply a move that lures  buyers or sellers into the market,  

[20:20] creating liquidity pools that smart  money players use to their advantage.   Inducement can help you spot potential  reversals and entry points for trades. 

[20:32] Basically, you need to spot when the market's  trying to trick you. That's where inducement   comes in. It's a smart way to figure  out what the market's really up to.   So picture this: the price is  going up, and it looks like it's  

[20:46] about to break through a high point. Traders who like to buy when prices   break out will be itching to get in! And anyone who's betting on the price   going down will have their stop losses  ready to go if it breaks that high.  

[21:02] This is exactly when the big players, the smart  money, decide to sell. They're betting the price   will drop. This is inducement: the market shows  you one thing, but plans to do the opposite. 

[21:15] First, the big players gather up their positions.  That's the build-up. Then, they make it look   like the price is going one way. That's the inducement. Finally,  

[21:27] they do the opposite of what everyone  expects. That's when they cash in.   So, when you're looking at a chart,  keep an eye out for these fake-outs.  If the trend's been going down, watch for  a quick jump up before it drops again. 

[21:42] That's your chance to sell. If the trend's been going up,   look for a quick dip before it climbs  again. That's when you want to buy.   We talked before about strong highs and  lows and buy-side and sell-side liquidity. 

[22:01] For instance, when you see equal lows forming  a double bottom, that creates a support level.  Traders buying at this support will place their  stop losses below these lows, creating a pool  

[22:15] of sell-side liquidity . Smart money players can  use this liquidity to fill their own positions.   To profit from inducement, you need  to think like the big players. They're  

[22:27] looking to execute large orders without  moving the market against themselves.  So they use these liquidity pools to their  advantage. When you see price approaching a   strong high or low, be prepared for a potential  fake-out move before the real trend continues.  

[22:46] One way to use inducement in your trading  is to focus on "liquidity sweeps".  This is when price briefly moves beyond  a key level, triggering stop losses and   creating liquidity, before reversing. These sweeps often occur just before a  

[23:03] significant move in the opposite direction. pay attention to fair value gaps and supply and  demand zones. These are areas on the chart where  

[23:15] price has moved quickly, leaving unfilled  orders. Price often returns to these areas,   creating opportunities for trades.

[23:28] Then, it tries to go lower  but can't quite make it.  There's this pivot high point nearby.  If the price breaks above that,   And that's exactly what happens.  This creates what a demand zone,  

[23:45] and a fair value gap. It's like a magnet for  the price - it often comes back to these spots.  And watch what happens next. Before it takes  off higher, price does something tricky.  

[23:58] It creates a new low point, getting more  buyers interested. Then it quickly drops   below that low. This is the inducement - it's  tricking people into thinking it's going lower.  

[24:11] This is how inducement works  in trending markets too.  When the price is in an uptrend, look for  lows to be taken out before the next leg up.  In this particular case, we can spot several  potential entry points where the price ran  

[24:27] a low before continuing higher. The key thing to watch for is how   the price closes around these old lows. If it quickly bounces back after taking   out a low, that's a strong sign  that the uptrend is still intact.  

[24:43] inducement setup (where you think the price  will go up after tricking people into thinking   it's going down), wait for the price to  actually start moving up before you enter. 

[24:58] You might miss the absolute bottom, but  you'll also avoid a lot of false signals.  Market structure mapping will make  the difference here. I repeat,   inducement works best when it's aligned with  the overall trend or at key reversal points. 

[25:15] If the market's been trending up for days, an  inducement to the downside at a major demand could   In my own day trading journey, I saw immediate  improvement once I started using volume profile. 

[25:33] Volume profiles are one of the  most powerful trading tools.  They show how much volume  occurred at specific price levels.  This is key because it gives more useful info  than traditional volume tools, as they only  

[25:47] show total daily volume. To use volume profiles,   go to the left side of your chart platform. Look for "forecasting and measurement tools". 

[25:59] And add the "anchored volume profile".  Then, click on your chart where you want   to apply the profile. show trading volume at each price level. Bigger bars mean more volume at that price. 

[26:16] The middle line is the point of control  - the level with the most trading volume.  High trading volume matters because it shows  where buyers and sellers had lots of interest. 

[26:28] They took big action at those levels. If price  comes back to these levels in the future,   there might be interest again. This creates potential trade   entry and exit opportunities.

[26:45] with the concepts we talked before, key points in  the market structure, or supply and demand areas.  Start by applying the anchored volume profile at  the beginning of a price move. The profile will  

[26:59] only calculate data after that point. The point of control shows   where the most volume occurred. This high-volume zone becomes an area of interest. 

[27:11] If price returns there, it could  present long trade chances.  The real power comes from pairing  high-volume areas with key levels. 

[27:25] Zoom out and look for important  reversal points that create a key level.  If these align with your high-volume  zone, it makes that zone even stronger.  The higher quality the zone, the more likely  price will react there in the future.  

[27:43] Also, look for other high-volume bars  that line up with reversal points too.  These combos of volume and key levels create  high-quality zones to watch for your trades. 

[27:56] You can also apply the volume profile tool to  larger chart areas. This helps find the best   key zones across a wider range. Look for points of control that   line up with multiple reversal points.  These give you key zones to focus on.  

[28:14] my biggest problem was trading the wrong trends. I kept getting caught in false   moves and choppy markets. One time frame would show an uptrend,  

[28:27] and another one a downtrend. You might have this problem too!  Which one should you trade? In my case, the solution was   extremely simple! I simply monitored the 10-period  Simple Moving Average on the daily chart.  

[28:43] If you need a simple way to filter “buy” and  “sell” trades, just use this simple method.  Price above the moving average on the daily  chart? Look for buys on shorter time frames.  

[28:55] If the line slopes up, it's a bullish trend. Price below the moving average? Look for sell   trades. A downward slope means a bearish trend. Price near or crossing the moving average  

[29:09] often? Wait for a clear trend or avoid trading. the 10-day SMA, use this info to trade on shorter  time frames. Monitor the market structure, find  

[29:25] your liquidity areas, mark your supply and demand  zone and confirm these with the volume profile.  This way, you dodge false signals and choppy price  action. You only trade with the bigger trend. 

[29:39] This is how you day trade  using smart money concepts.  You won't get lost in a sea of  conflicting signals. Instead, you   align your trades with the main market flow. And,  

[29:51] you’re ready for more smart money secrets,  go ahead and watch one of these videos!