Smart Money Concepts
Liquidity, order blocks, fair value gaps, break of structure and change of character.
The idea behind SMC
Smart Money Concepts describe how large participants may leave footprints on a chart as they build and close positions. It is a framework for reading context, not a guarantee of how price will move.
Liquidity
Liquidity collects where many orders rest — above obvious swing highs (buy-side) and below swing lows (sell-side). Price is often drawn towards these pools before a larger move develops.
Order blocks
An order block is the last opposing candle before a strong move that breaks structure. Traders watch these zones for a reaction when price returns to them.
Fair value gaps
A fair value gap is a three-candle imbalance where the wicks of the first and third candles do not overlap. Price frequently revisits these gaps to rebalance before continuing.
BOS and CHoCH
A break of structure (BOS) continues the existing trend. A change of character (CHoCH) is the first break against it and can signal a shift. Always read them on the time frame that matches your plan.
Key takeaways
- Liquidity rests beyond obvious highs and lows.
- Order blocks and FVGs are zones to watch, not signals.
- CHoCH is the first warning of a trend shift.
Market Analysis Tools
Live chart, Fibonacci levels and pre-trade checklist.
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