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Smart Money Concept Course

This document is an introduction to a course on Smart Money concepts for trading currencies. It discusses key ideas like how large financial institutions can manipulate markets, and types of market structures including trends, ranges, and reversals. It covers supply and demand zones, liquidity concepts, and taking entries on lower timeframes. The goal is to help traders identify market behavior caused by "Smart Money" and trade in harmony with their manipulation.

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Alex Finance
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12K views63 pages

Smart Money Concept Course

This document is an introduction to a course on Smart Money concepts for trading currencies. It discusses key ideas like how large financial institutions can manipulate markets, and types of market structures including trends, ranges, and reversals. It covers supply and demand zones, liquidity concepts, and taking entries on lower timeframes. The goal is to help traders identify market behavior caused by "Smart Money" and trade in harmony with their manipulation.

Uploaded by

Alex Finance
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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WELCOME

TO
SMART MONEY CONCEPTS
COMPLETE COURSE
Erudite Academy
INTRODUCTION TO SMART MONEY
• Smart Money refers to the collective force of big money that can
move the Market
• The central bank, hedge funds and other big institutions are a force
behind Smart Money
• Smart Money negotiate large volume in the Market compared to
Retail trader
• My goal in this course is guide you through Smart Money Trading and
help you identify specific market behavior that will allow you to trade
and invest in harmony with market manipulation caused by Smart
Money
KEY WORDS TO FAMILIARIZE YOURSEL WITH
• Smart Money: Big banks and financial institutions such as Central
banks, Hedge Funds etc
• Mitigation: The is where Smart Money breakeven on their losing
positions
• Liquidity: Refers to areas where retail traders put their stop loss and
pending orders such as buy limit, sell limit etc.
• EQLs & EQHs: Refers to equal lows and equal highs and these are
places where price visited more than once and reversed
SECTION ONE
MARKET STRUCTURE
INTRODUCTION TO ADVANCED MARKET STRUCTURE
WHAT IS MARKET STRUCTURE
• Market Structure is perhaps the most important aspect of analyzing
the market and reading the charts
• Market Structure is the framework and backbone of the market
• A good understanding of market structure will elevate your trading
beyond belief
• In this lesson we will go over different conditions of the market
Three Types of Market Conditions
• There are three conditions in which the forex market exists
1. Up trending Market: The market creating a series of Higher Highs and
Higher Lows (HH/HL)
2. Down Trending Market: Market creating Lower Lows and
Lower Highs (LH/LL)
3. Ranging Market: The Market is creating equal Highs and Lows. A Ranging
Market is also called a consolidating Market
The Basic Market Structure
• Break of Structure: This is also known as the BOS. It is when the
market breaks the previous higher high or lower low to signify a
continuation in trend or breaks a high low or lower high to signify a
reversal in trend
Example of BOS for Trend Continuation
Example of BOS for Trend Reversal
Swing Structure
• Swing points are the highest points in the Market before a pullback
• A Swing High is the highest point in the market created by a swing low
• Swing highs are created by Swing lows in an uptrend market
• A Swing Low is the lowest point in the Market created by a swing high
• Swing lows are created by Swing highs in a downtrend market

• Everything between the swing high and swing low is called internal
structure
Examples of Swing Structure Uptrend
Example of Swing Structure Downtrend
Strong Highs/Lows Vs Weak Highs/Lows
• The Purpose of a Low is to take out the high. If the low succeeds in
taking a high then it becomes strong and protected. If it fails then it
becomes weak and targeted

• The Purpose of a High is to take out a Low. If the high succeeds in


taking out a low then it becomes strong and protected. If it fails then
it becomes weak and targeted
Example of Strong Low and Weak High
Example of Strong High Weak Low
Confirmed Trend Vs Unconfirmed trend
• For the trend to be considered a confirmed trend whether the market
is coming from a downtrend to an uptrend and vice versa we need to
see the break of two consecutive of structural points.
• The other way to confirm a trend is when price creates two swing
points after a major reversal
• If the market does not do any of the above, then it is considered to be
unconfirmed
Examples
Examples
Examples
Change in Trend Direction Vs Change of Character
• An uptrend market cannot continue forever and a downtrend market
cannot continue forever.
• An uptrend market will have to reverse into a downtrend and a
downtrend market will have to reverse into an uptrend
• That reversal is call trend change
• A change of character on the other hand is an early sign of trend
reversal. It is not a trend reversal but an early signal of a trend
reversal
Example of a Trend Change
Example of a change of Character
Premium Vs Discount
• The Fibonacci tool is one of the most powerful tool for determining
the right zone to buy or sell
• A Smart Money Fibonacci comprise of three important levels
• 0%
• 50%
• 100%
• Everything above 50% is called premium zone
• Everything below 50% is called discount zone
• We sell premium and buy discount
Example
Example
Example
Multiple Timeframe Structure
• The market is fractal. What that means is that what happens on the
Higher time Frame happens on the Lower time frame
• The fractal nature of the Market helps us with top down analysis
• A run on the Higher time frame will be a trend on the Lower
timeframe
Example
SECTION TWO
SUPPLY AND DEMAND
UNDERSTANDING WHAT MOVES THE MARKET
What is Supply and Demand
• The law of supply and demand is a theory that explains the
interaction between the sellers of a resource and the buyers for that
resource.
• The theory defines the relationship between the price of a given good
or product and the willingness of people to either buy or sell it.
• Generally, as price increases, people are willing to supply more and
demand less and vice versa when the price falls.
• The law of supply and demand, one of the most basic economic laws,
ties into almost all economic principles somehow.
• In practice, people's willingness to supply and demand a good
determines the market equilibrium price or the price where the
quantity of the good that people are willing to supply equals the
quantity that people demand.
• The same principles of Supply and Demand apply also in the Forex
Market
• Price moves up because demand is greater than supply and vice versa
Demand Creation
Supply Zone Creation
Demand Refinement
Supply Refinement
Fractal Refinement Of Demand and Supply Zones
Demand and Supply Reversal Patterns
Drop Base Rally and Rally Base Drop
Supply and Demand Continuation
Rally Base Rally and Drop Base Drop
Criteria for choosing a Valid Zone
• Must lead to the Break of Market Structure
• The More the Significant the Break of Structure is the stronger the zone
• Must lead to a creation of a flip zone
• A Flip Zone is created when one Zone fails in the process creating another
Zone
• The Zone must have huge momentum
Structural Supply and Demand Zones
Flip Zone Vs Change of Character
Flip Zone Vs Change of Character
SECTION THREE
LIQUIDITY CONCEPTS
IF YOU CAN’T SEE THE LIQUIDITY YOU ARE THE LIQUIDITY
What is Liquidity?
• Liquidity is the ease with which an asset is converted into cash
without affecting its price value
• The FOREX market is a zero sum game, which means that for a
trader/institution to buy/sell 1 currency pair it's necessary that there
is another trader/institution with an opposite position.
• If Smart Money (Banks) want to buy a currency pair they will need
sellers in the market, the existing facility to place these positions In
the market is called LIQUIDITY.
Erudite Academy
• The Liquidity is defined by Stop losses, where the Stop losses exist is
where the liquidity also exists, Smart Money need to activate the stop
losses of existing orders in the market so that they can place their
positions in the market.
• The banks manipulate the price because of liquidity, but why? banks
negotiate large trading volumes and sometimes find it difficult to find
the other side of their trades, so they manipulate the price so that
they can have their positions in the market
Types of Liquidity
• We have two types of liquidity in the Market
• The Buy Side Liquidity
• Structural High
• Equal Highs (EQH)
• Previous day’s high
• The Sell side Liquidity
• Structural Low
• Equal Lows (EQL)
• Previous day’s low
Buy Side Liquidity
Sell Side Liquidity
How to Apply Liquidity Concepts
• As a Sweep Zone
How to Apply Liquidity Concepts
• As Inducement
SECTION 4
LOWER TIMEFRAME ENTRIES
Erudite Academy
How to Take Lower Timeframe Entries
Trade Management
Putting It All Together
Erudite Academy
THANK YOU SO MUCH FOR
PURCHASING THIS COURSE AND
I WISH YOU ALL THE BEST IN
YOUR TRADING JOURNEY
Erudite Academy

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