Smart Money Concepts [InfinitySMC]

# Smart Money Concepts (InfinitySMC) – Full Strategy Explanation

## 1. Strategy Philosophy (Core Idea)

The **Smart Money Concepts (SMC)** strategy focuses on tracking the behavior of **institutional traders (smart money)** instead of relying on lagging retail indicators.

The core assumptions are:
- Markets move in **structures**
- Institutions leave **footprints** in price action
- Liquidity is deliberately targeted before major moves

This indicator **does not predict price**, it **maps market structure and liquidity** to help traders align with institutional flow.

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## 2. Market Structure Logic

### 2.1 Swing Structure vs Internal Structure

The strategy analyzes **two layers of structure**:

| Structure Type | Description | Purpose |
|---------------|------------|--------|
| Swing Structure | Higher timeframe structure | Trend bias |
| Internal Structure | Lower timeframe structure | Entry precision |

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### 2.2 Break of Structure (BOS)

A **Break of Structure (BOS)** occurs when price breaks a previous **high or low in the trend direction**.

- **Bullish BOS** → trend continuation
- **Bearish BOS** → bearish continuation

**Interpretation:**
Smart money is still active in the current direction.

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### 2.3 Change of Character (CHoCH)

A **Change of Character (CHoCH)** happens when price breaks structure **against the prevailing trend**.

- Bullish CHoCH → bearish → bullish transition
- Bearish CHoCH → bullish → bearish transition

**Interpretation:**
Early warning of a potential trend reversal.

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## 3. Swing Highs & Lows (Market Geometry)

The indicator automatically labels:
- **HH** – Higher High
- **HL** – Higher Low
- **LH** – Lower High
- **LL** – Lower Low

It also classifies liquidity strength:
- **Strong High / Strong Low**
- **Weak High / Weak Low**

**Rule:**
Weak highs/lows are more likely to be taken as liquidity.

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## 4. Order Blocks (Institutional Price Zones)

### 4.1 Definition

An **Order Block (OB)** is the last opposing candle before an impulsive move driven by institutions.

They represent:
- Institutional accumulation or distribution
- High-probability reaction zones

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### 4.2 Internal vs Swing Order Blocks

| OB Type | Timeframe | Usage |
|-------|----------|------|
| Internal OB | Lower TF | Entries |
| Swing OB | Higher TF | Bias & major zones |

Order blocks are **filtered using ATR or Cumulative Mean Range** to remove noise.

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## 5. Equal Highs & Equal Lows (Liquidity Pools)

### Equal Highs (EQH)
- Multiple highs at similar price
- Buy-side liquidity resting above

### Equal Lows (EQL)
- Multiple lows at similar price
- Sell-side liquidity resting below

**Concept:**
Price often sweeps liquidity before real expansion.

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## 6. Fair Value Gaps (FVG)

A **Fair Value Gap** occurs when price moves aggressively, leaving an imbalance.

- **Bullish FVG** → price likely retraces downward
- **Bearish FVG** → price likely retraces upward

**Rule:**
Price tends to revisit FVGs before continuation.

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## 7. Premium, Discount & Equilibrium Zones

Based on the latest swing range:

| Zone | Meaning |
|----|--------|
| Premium | Sell zone |
| Discount | Buy zone |
| Equilibrium | 50% of range |

**Golden Rule:**
Buy in discount, sell in premium.

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## 8. Multi-Timeframe Highs & Lows

The indicator can display:
- Previous Daily High/Low
- Previous Weekly High/Low
- Previous Monthly High/Low

Used as:
- Liquidity targets
- Take-profit zones
- Reversal areas

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## 9. Trend Detection

Trend is derived from **internal structure**, not indicators.

- Bullish structure → bullish bias
- Bearish structure → bearish bias

Optional candle coloring reflects current structure.

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## 10. Alerts System

Available alerts:
- BOS & CHoCH (internal & swing)
- Order block breaks
- Equal highs & lows
- Fair value gap formation

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## 11. Practical Trading Workflow

1. Identify higher timeframe trend
2. Wait for CHoCH
3. Confirm BOS in new direction
4. Mark Order Block in premium/discount
5. Align with FVG or liquidity sweep
6. Enter on lower timeframe
7. Target liquidity (EQH/EQL or PDH/PDL)

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## 12. What This Strategy Is NOT

- ❌ Not a signal generator
- ❌ Not predictive
- ❌ Not a trading robot

It is a **market structure framework**.

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## Final Summary

**InfinitySMC** provides a complete Smart Money mapping system:
- Structure
- Liquidity
- Institutional zones
- Multi-timeframe context

It allows traders to **wait for price to come to them**, instead of chasing the market.