E Book Smart Money SMC
E Book Smart Money SMC
E Book Smart Money SMC
Management of risks.
PULSE AND CORRECTION
When the market momentum becomes very strong either up or down, these
price actions are called momentum, the price usually moves in two directions -
momentum and correction. You can understand it this way: there are a lot of
institutional and bank buyers in the momentum movement, and in the
correction phase, retail traders are trying to buy, sell, and the market moves in a
certain range.
Now I'm going to explain to you in detail what it looks like.
Pulse.
Correction.
CORRECTION RULE
X induce/rollback
IDM
IDM
This is the first sign
reversal from bearish to
IDM bullish. Because the main IDM
one broke through
IDM maximum. Only in this case,
the breaking of the trend IDM
Main High
IDM
Basic minimum IDM
The price must break
first rollback/IDM for
confirmation of the main
maximum
In the first attempt, the market Price did not close The price did not close the
took liquidity, but after a small previous main previous major low and the N-
pullback, it closed again below low and candle A. I just candle. I just removed liquidity
this candle and became a valid removed liquidity and this and this is not BOS. If the candle
BOS. is not BOS closes with a body below N,
then BOS is correct.
Remember!
Bull market or bear market, it doesn't matter, in both scenarios, you need a full
candle close to confirm the breakdown of the structure. If the candle breaks
through the minimum/maximum with a shadow, then these structures are
considered as reversal liquidity. Now I'm going to show you some charts of bullish
structures, how you can identify valid and invalid BOS/CHoCH.
In the first attempt, candle H took Candle N closed the previous high
Candle K closed the previous liquidity, but after a small pullback, and the high of the previous
major high, so this structure again candle A fixed above candle H candle, so this structure becomes
becomes valid. and became true BOS valid
CHO CH
No POI
Remember!
These are explanations of bullish and bearish charts. You need to carefully and
calmly understand each point, because once you clearly understand the
structure of the graph, the rest of the things will become clear. Try to get as
deep as possible into each point and topic again and again, and then move on
to the next one. It's a unique way of building a structure
bullish structure
confirmation more
high high the market should
take down the IDM
It is an internal structure
between the main
high/low
It is an internal structure
between the main
high/low
Bearish structure
After Rollback/IDM
confirmed our LL
After
Rollback/IDM
confirmed
our ll
Valid breakdown
structures before that, the price
could not close with the body
Bearish/bullish imbalance
I M BA LA NCE
The gap between the high of
candle A and the low of candle N
that has not been eliminated is
The gap between the high of candle K therefore called an imbalance.
and the low of candle H, which has
The gap between the high of the K already been closed, so there is no
candlestick and the low of the H candlestick, imbalance
which has not been eliminated, is therefore
called an imbalance.
A gap between the high of the K
candlestick and the low of the H
candlestick that has not been
eliminated, so this is an imbalance
These are the given examples for finding extreme imbalance for an entry.
Imbalance is mainly used during entry to look for POIs and block orders. But if
below the imbalance all blocks are softened
you can use the imbalance as a place to enter.
Flow softening
or der s
Flow softening
orders
Last move
sales before purchase
called bullish
order flow
Last move
sales before purchase
called bullish
order flow
Last move
sales before purchase
called bullish
order flow
ORDER BLOCK
The order block is the main part of the smart money concept during entry. An order block
means the place where smart traders enter to buy and sell. To mark any bullish/bearish block
of orders, the candle must take liquidity from the previous candle or structure and create an
imbalance. And now we are going to discuss in more detail how we can identify and trade
this. You have to remember, the price usually reacts to the Decesional order block - this is the
first block before or after the IDM and the Extreme order block - the most extreme block to
the beginning of the impulse. All other blocks are traps. If the price breaks through the first
block from IDM, then the price will go to the extreme block.
Previous candle
peaked,
The previous candle has which means that
reached a maximum, which liquidity taken
means liquidity is taken
No liquidity
so we can't consider it
like a block of orders
correct imbalance,
but no liquidity Candle took off
so we cannot consider liquidity, but no
it as imbalance so we
order block. It's a smart we can't consider
trap its like a block of orders
awn with
there is an imbalance
p block
called IFC
After extraction
liquidity from the line
trend and touch block
order can be opened
pur c h as es
Market Momentum
is bearish.
Probability of sale
Market Momentum high after removal
maximum U candles
is bullish.
Purchase Probability
high after release Market Momentum
from the low of the 1st candle
is bearish.
Probability of sale
high after removal
Market momentum is now maximum in candles
turning bullish, so there is a
Market Momentum high chance of buying after
bearish, therefore taking
trader's purchase minimum A candles
Market Momentum Is Bullish
contraindicated. Buy High Probability After
Short term Breaking A Candle Low
purchase after
withdrawal
low R candles
Now the market momentum
is turning bullish, so there is
a high probability of buying
after the low of the K candle
is processed.
Candle U removed
liquidity maximum
8
candles and you can sell the and
opening of the next candle if
Candle I knocks out the you are on LTF, you can also
previous low of the candle, and mark the candle as
the next candle closes above it. POI
I candle becomes POI
N candle softens this zone,
you can buy here on LTF
confirmation, but if you are
four already in LTF, then buy
directly here
Candle B has high, but it is not a valid poi as the recent
structure has broken (the main CHoCH, so we need to
wait for the structure to develop and IDM to be removed
The price reaches the
order block which
acts like a POI can be
bought after
LTF confirmations, but
if you are already in LTF, As soon as the price softens the block of Do not mark B as a point of Candle H touches
then buy directly here orders, we see the reaction. Candle A closes interest and do not sell on U POI candles after
above the R candle and this becomes an OB the K pullback, because IDM was taken and
now you can sell
2
Candle T removes the session one candle (engulfing can be used as OB) CHoCH was confirmed, now
low (it can be any session), you which is also known as POI and the D candle you need to wait for the IDM here in LTF.
can buy after LTF is confirmed. softens this point and can be bought here for to be removed and sell
Candle also becomes an order LTF confirmation, but if you are already in Confirmation
block LTF, then immediately buy here candles A and N
also act as POIs,
nine
3 because it was
1
maximum taken
previous candle
structures
HTF-M15
LTF-M1
Price reaches extreme OV
after IDM extraction
HTF-H1
LTF-M5
Before buying/selling we
need inducement
or liquidity, then
we can make an
entrance. We can't login
without IDM even in flip
LTF
and CHOCH cases
Price directly
broke through the previous
low and this time the close of
the candle is not important,
even the shadow is also
considered a valid CHOCH, but
only LTF at the time of entry
Before buying/selling we
LTF
need inducement or
liquidity, then
we can make an entrance.
We can't login without IDM
even in flip and CHOCH
cases
Demand failed X
CHoCH is the first sign for a reversal and when the trend changes you will see
two types of entry, the first is CHoCH with prompting and the second is CHoCH without
prompting. No incentive structure needed in this case, just remove the previous POI low/
high and we can enter according to our entry module and the same applies in bullish and
bearish conditions. Let's understand with the help of the given diagrams and examples.
LTF
LTF
touches POI and closes bearish, and we can sell at
the opening of the next candle
LTF
the open of the next candle
Pre-take
large minimum and
purchase at the opening
the next candle, and the
Taking the minimum same in all entries on one
previous candle and candle
purchase at the opening
m15
waiting for the summit
login confirmations
entrance to m1
scrapped internal
structuresFROM
s m5 good
the confirmation
FROMfir below
The price took liquidity and closed t
m1
FROMuse scrap
When far from choch you can use
FROM
urges, you can immediately enter
OB
without interruption
the sde lol, and also
from new ob
EXAMPLES OF TRANSACTIONS The price removes the outer
FROM
liquidity ain't boss, after that oh
us ually
correction is coming
nearest FROMhis
m15
minimum m5
OM
FspRrucec
liquidity from
double top,
in this case idm is not
needed
OB
st rategies
m1 scrapped b
structure is
choch
FROM
the nearest
MANAGEMENT OF RISKS
Trading is a game of probabilities, so you must risk according to
your capital and your own opportunities, there are no holy strategies, you have to think
both ways, first think about the risk you take in the trade, don't think about the profit,
when you focus on risk management, then the profit will be automatic. Many people do
the wrong thing by focusing only on profits and start thinking only about
about profit, forgetting about risk management, because it's all about the game of
probabilities, so think about probability from both sides. You should always take
trading with proper risk management, if you have your own live account then take
1%-2% max in one trade and
if you have an account with a fund, take 0.25-1% risk per trade. When the trade moves in
line with your direction, focus on protecting your Stop Loss first. When the market breaks
a recent high or low then move your Stop Loss to break even and don't try to catch
1:30-50RR because most traders are brainwashed on social media to show you a big RR
but it's actually 1:5-1:10 - it's a great risk/reward ratio, you don't have to go for a big RR.
Focus on protecting what you have and wait for entry
with a high probability. Don't trade emotionally or you won't be able to make money.
Trade without emotion and always trade high probability POIs, don't trade everywhere,
patience is a big part of trading so wait for it and enter when everything goes well as
planned.
Self account risk per trade 1-2% Trading
account risk 0.25 - 1%