Smart Money Concepts (SMC) - Introduction
Understanding how institutional traders move markets.
What is Smart Money?
"Smart Money" refers to institutional traders:
- Hedge funds
- Banks
- Market makers
- Large investment firms
Unlike retail traders, they:
- Trade in blocks that create visible price patterns
- Hunt retail stop losses before reversing
- Leave "footprints" we can identify and follow
Why SMC Matters for You
Edge
Trade alongside institutions, not against them. When you identify where smart money is likely to buy or sell, you can position yourself with them.
Timing
Enter after stop hunts, not during them. SMC helps you avoid common retail traps and enter at optimal points.
Levels
Identify where institutions are likely to buy/sell. These levels are more significant than traditional support/resistance.
Key SMC Concepts in Alstrum
| Concept | What It Means | Alstrum Indicator |
|---|---|---|
| Order Block | Zone where institutions placed large orders | Green/Red shaded rectangle |
| Fair Value Gap | Price inefficiency (gap) that tends to fill | Purple shaded zone |
| Liquidity Grab | Stop hunt before reversal | LIQ badge + amber line |
| Premium Zone | Overvalued area - expect selling | Light red shading |
| Discount Zone | Undervalued area - expect buying | Light green shading |
How SMC Appears in Alstrum
In Volt Table
SMC badges on signal rows:
- LIQ - Liquidity zone nearby
- OB - Order block present
- FVG - Fair value gap identified
In Stryk Charts
Shaded zones showing institutional levels:
- Green zones = bullish order blocks
- Red zones = bearish order blocks
- Purple zones = fair value gaps
In Trace Analysis
AI explains SMC context for each signal:
- Why an order block is significant
- Whether an FVG is likely to fill
- Where liquidity might be targeted
The SMC Trading Framework
Step 1: Identify Market Structure
- Is the market trending or ranging?
- What's the higher timeframe bias?
Step 2: Find Key Levels
- Where are the order blocks?
- Are there unfilled fair value gaps?
- Where is liquidity clustered?
Step 3: Wait for Confluence
- Signal + Order Block = Higher probability
- FVG + Trend direction = Gap fill opportunity
- Liquidity sweep + Reversal = Entry signal
Step 4: Execute with Precision
- Enter at institutional levels
- Stop beyond the structure
- Target the next significant level
Learning Path
Start with these concepts in order:
- Order Blocks - Institutional support/resistance
- Fair Value Gaps - Price imbalances
- Liquidity Concepts (coming soon)
- Premium & Discount Zones (coming soon)
SMC vs Traditional Analysis
| Traditional | SMC Approach |
|---|---|
| Support/Resistance lines | Order blocks (zones) |
| Random price levels | Institutional entry points |
| Lagging indicators | Price action footprints |
| "Where" the level is | "Why" the level matters |
Common Misconceptions
"SMC is just support/resistance"
Order blocks are specific candle formations where institutions entered, not just price levels.
"Every order block works"
Not all order blocks are equal. Context matters - trend, timeframe, and confluence.
"SMC guarantees profits"
SMC increases probability, not certainty. Risk management is still essential.
Getting Started with SMC
Free Users
- Read the education content
- Observe SMC badges in Volt
- Understand the concepts
Pro Users
- Full SMC overlays on charts
- Detailed Trace analysis with SMC context
- Filter signals by SMC indicators
Master order blocks first before adding complexity. One concept well understood beats five concepts poorly applied.