SMC Deep Dive
Institutional order flow mastery
Smart Money Concepts at the advanced level requires deep understanding of institutional order flow.
Order Blocks in detail: - Bullish OB: Last bearish candle before a bullish impulse - Bearish OB: Last bullish candle before a bearish impulse - Mitigation: When price returns to the OB zone - Breaker: Failed OB that becomes opposite S/R
Fair Value Gaps (FVG): - Created by 3-candle patterns with gaps - Price tends to fill FVGs before continuing - Use as entry zones in trending markets
Liquidity concepts: - Buy-side liquidity: Stop-losses above swing highs - Sell-side liquidity: Stop-losses below swing lows - Liquidity sweep → reversal is the core SMC pattern
Pro tip: The highest probability SMC trade: Liquidity sweep at a daily level → FVG entry → OB target.
Common mistake: Marking every candle as an order block. Better: Only mark OBs that created clear impulsive moves with volume.
Key takeaways
- Order Blocks mark institutional entry zones
- FVGs are imbalances price tends to fill
- Liquidity sweep before reversal is the core pattern
- Breaker blocks are failed/flipped OBs
Quiz
- A Breaker Block forms when: Answer: An OB fails and flips to opposite S/R. Breaker = failed Order Block that becomes opposite support/resistance.
Educational content, not financial advice.