SMART MONEY CONCEPTS trading strategy
Today, we're going to be looking at the Smart money, trading strategy. So let's get straight to it. I traded them. So I hope you'll gone extremely well.
My name is David and welcome to my channel where I go through trading strategies, that I find on the web and YouTube. And then I use code to debunk the bad ones and find the good ones. Today. We're going to be looking at something completely different and this is going to be a
series of a couple of videos. And the reason being is because this strategy is a lot more difficult, a lot more in-depth. And I'd like to go into all of the intricate parts of the of the trading strategy, so that everything could be understood. I'm also learning as I go along. Alright, so I'm trying to get the best of our understanding of this trading strategy because I believe that it will be the trading strategy that I will be using day in day out.
What is the trading strategy is a smart money trading strategy that works on structure. It also works on the Wyckoff method but also has other variants, which will be looking at also along the way, it structure and plays and humongous part inside of this trading strategy and understanding how smart money Stow. The Institutions.
And the whale is, if you will all of those kind of big boys in the group are actually manipulating the market to send money in the direction where they want. Don't I guess the best thing is to get to my computer. We're going to be discussing structure today. So first thing is going to be the structure. I'm also going to go through and tight, end, overview of multiple parts of the order blocks and things like that inside of the strategy, so that we can understand things together. And then I will go into more detail over.
It's Monday and next Friday, more detail into the actual trading strategy itself. Here's the plug. It will be on tradingview. I will be coding it and you will be able to find the links down in the description below. So if you are interested in following me, let's get over.
Let's have a look at the first parts of this trading strategy that it's go. Okay, here we are on my computer and the first part of this, I'm going to give credit where credit is due. As always the actually trading strategy was inspired by this guy, which is mint. Infect great, YouTube channel.
Lots of wonderful information about the mint FX trading strategy. Today. We're going to be going through it. We're going to be going go step by step through all of those stunts, parts of the trading strategy over the next couple of days and I'll be coding it as I got a longer to get the best possible results. I do suggest again have a look. Before I go any further. I'd like to say be very, very careful of this spammers in the comment.
I have realized that The last couple of weeks, there's been more and more as the channel has been growing. So be very careful. I will never contact you via WhatsApp alas for your WhatsApp. I would never ask that any Investments and I will never ask for your money just to our go through that. 80 00:02:55,500 --> 00:02:55,499 Very, very careful.
We're going to be looking at structure. First of all, why the market makes these highs and lows? We're going to be looking at trend lines and why they're not as good as they're made out to be things like highs and lows Head and Shoulders patterns. All of those kind of things that we as retailers dumb money. Yep, that's what they called.
Us are actually creating and they are being faked out all over the place and you're losing money. And in part 2, we'll be all the blocks, which will look at further down the line. Okay, let's go back over to computer. Okay, so good important part about this. You can't see this because I'm over. Let me go over here, right? Okay, an important part of this is the composite, man. 106 00:03:32,500 --> 00:03:32,499 Now,
this is a wind cover theory. That the composite man is, the man has the most amount of money inside the market. Meaning, institution, big Banks. And AKA Why I was in the, in the crypto World manipulation is made by these whales that by these institutions to push money in the direction, where they want to go using liquid liquid. It easy to fetch liquidity in the market and to liquid.
I asked to take our money to take our positions in the opposite direction. This, these patterns happen all over. We all know that the markets are fractal. So they're happening.
On one minute time frame is 2 to 1 hour time frame, 24 hours to Dailies each and every one of these at markets, each and every one of these time frames are acting in the same way, but in different ways at the same time, we're looking at the retail fake outs and why the fake outz happen. And why it, what these patterns over there are for grabbing your liquidity 2010. I think we dating your stock price, stop losses, and also taking, like I said the money in the opposite. Correction, so let's go over to a chart, very, very quickly here. Let's hide these indicators very quickly. So now, we know that the composite man is not on your side.
Here is certainly not going there to help you make money. He's after all of your liquidity and we need to work in the same way that he is. So we can follow his game and make money at the same time. Okay, let's have a look at this example here very, very quickly. Just an example of how I would trade or you're done money or whatever, you'd like to call it with trade. We see this kind of pattern here all the time where we've actually come into a bullish area.
Expecting can prices to get high. Everybody's getting extremely excited. We create ink.
I Arlo's continuing along, hopefully, for more upside. Obviously, the institution wants take advantage of our money, take, as many take out as many people as I possibly can as they go along. So they're going to crank consolidation areas. They're going to Create areas of patterns institution, patterns, triangles will flags all of those kind of things as they go along so that they can take out our liquidity as we're going along.
So you would have been right to seen these bear patterns here, which would have been great. And then we start going along and we start seeing a little bit of a consolidation area. Still above this low here, but we, as we would have started seeing things like this.
So the per Market starts moving against that we've taken out this low here, which would have had that, probably a lot of orders from even the institutions in this area here, but it's something that they're willing to come back and pick up later on, there will be looking at block orders or the blocks afterwards, and why this would have moved back down here. But yeah, so, this area here, potentially, as Traders, we would have started drawing lines like this here, where we would have So on seeing that there is a breakout here, expecting a breakout we would have got in maybe just here with a entry for a long as we're expecting price to continue this pattern, up towards the sky to the moon and it actually completely worked against us. We lost our in trees as long as they were stopped out here and we would come down into this short Zone. Hear this. Creating this pattern here, or which could have been around here or even lower creating a channel.
Maybe maybe a channel up here, which we would have got into as a short, maybe as we broke that pattern. So we could have gotten a couple of entries here. If we were lucky and we were keeping an eye on the charts, got in a good old entry, just here on this marking up, where we would have seen that? Yeah, we would have seen that. We Got a short here with breaking. Get this lower Channel.
We could have got a short just in here. Hopefully, which would have moved up and down maybe liquidated. A couple of people taking out stops here.
And then maybe even as we're breaking back up, we could have had another long in there expecting. It has the retest over here. We are taking out more long shorts here and we get our actual entry here before even dumps even lower.
We would expect Acted this to go up like this. It didn't it just worked again and faked out. Once again here, creating another breakout where we would have. Maybe got another long in short just in here. Let's go. How many positions? I have no idea that we would have been stopped out down here.
One here, one here. At least one here. A couple round this area here. We would long tear Gatlin stopped out as it would have come against us here. We would have shorted here and In the greedy dumb.
Neither I am I would have are not in the slightest taken profit here. Expecting it to come all the way down towards where it was and completely reversing against us. I would have kept my positions in Just Around Here, continually waiting for profit and Moneybags to roll in as I'm going along and yep, you guessed it. This would have bounced around taking out a lot of Of positions, creating patterns all over the place here, that dumb money would be drawing all over the place here. Some patterns.
It breaks out, breaks out that pattern. They're going against my short that I had just here. So we've lost any any stop losses that were here. Have been taken out now. Any long sweet of Longs for here? Would have been fine. Having some money on the table here, the institutions making lots of patterns and we find in textbooks from W's to support some resistance of breakouts fake-outs.
Ever think that you would have seen in textbooks, would have been in these patterns here as they start rebuilding up into a British pattern. Once again, taking out any shorts from above here, taking out any shorts from above here. Taking out. Any think all the way? How many positions would they have liquidated would have been absolutely incredible before pushing back, completely up to the upside and continuing this train, the same pattern that they were in before getting a stopped out left, right? And center and when you actually look at the bigger picture, the picture of the of the institutions, the only in thought important things here was where they've put in there.
The in the lows protecting the lows and vote coming on. Never coming below these lows. Except for this one here, where they would have been an order block, which we would have seen, they would have come back and tested that order block and back down to take out their order and then they would have come back up above, that order to go to highs. So, I've been working on these patterns is Pivot patterns here, which is the first part of this actual trading strategy. So the The idea is, as I was saying, we are actually creating get these lows here here. Here, here here, and we're never actually taking give those at Lowe's out.
We go through college, solid, dacian areas where we actually create order blocks, but they actually never ever come and go lower than these predicted areas. And then we actually come down after that we come down and we actually create a low. Our first set of lower highs here, which You can see here. Our lows lower lows lower lows and other consolidation area for to come and get some more liquidity out the market before creating even lower lows.
And then it, we dumping all the way down here. We're creating also the lower highs. As we go along here, always, always always creating and protecting their positions up here because this is where they're actually selling off. So yeah, as I was saying, these are ways of them protecting themselves, Against the market and also liquidating and creating liquidity in the market.
Liquidity is just literally orders in the market that they come away and obviously, they take other in the other direction, right? Now. We know how not to trade and how that they actual institutions are looking at the markets, totally different to ask and how that can liquidity is created and how that they are fetching the group liquidity in the market by come trapping Us in two. Count some breakouts. Now, what we're going to do is try and look at where we could get in trees in the same, sort of patterns using all the blocks. Now, all the blocks are created, when the institutions are ordering in the opposite direction, creating candle in the opposite color. And in there, none golfing candle will be made to push that market in the other direction.
So they are orders that the institutions will have to come back and pick up later before actually pushing the market higher. Our or pushing it for lower. So let's have a look at these. All the blocks, how they created using the golfing patterns for a bit more Confluence so that we are short of the entries that we're going to be taking. There is multi timeframes ways of looking at this and much more complex ways. Of looking at this.
I'm going to go into the very, very simple ones today. And then I look in more detail into multi time frames and also adding things like Wycoff and a couple of other patterns to improve on our entries, and make sure that Taking the great big, the best entries possible. Okay? To understand all the blocks you have to understand that liquidity, which we're talking about a minute ago. The market orders at the tops and the bottoms of all pivots here. I've got a pivot script that I created over here.
Helps us to find where the most liquidity is in the market. If you go over to the beginning over here, where we were all these red lines, and green lines are indicating where ver orders Could Have Lied. And haven't actually been taken out by the Banks or by the institutions, Etc. So, in the markets, there are what we're looking for to try and get onto the same wavelength, as these institutions Etc are in inefficiencies, in the market.
Now, in efficiencies come in different forms and created our created via things. Like after a drop, a we have a couple of large candles here. For instance, here would be an Indian. Shouldn't see if I could just draw this one here between here. I would say here and here would be an inefficiency at where candles go up and create a lot of bullish pressure.
And we actually come back down and feel those candles where the, the low of the top candle. It does not actually meet the height of the candle with a previous candle here. As you can see. There's a lot of space between the to hear a gap and that Gap is actually met by refilling as we go along as a strategy developer. This is the kind of thing that we should be looking for things. Like if you're in efficiencies in the marketplaces where candles actually don't meet between the two and we come back and fill them and in a later date gives us perfect entries for funding because we know that these are like magnets.
These inefficiencies are like magnets to the market. We know that they're going to come back and visit them later. You can see one just here.
If we go over here, we click this one here, you can see That none of this here was there was a big gap around this area here and we knew that the market would go up and come back and fill that Gap here and finish. Even more just here. So, we had our fell get filled on those two in the on the area there. So that is one way of looking at it in efficiencies and ways of in touring the market, we will look at that as we build our strategy. Another one is, is the is the order blocks. So all the blocks are displayed as the These blocks are red and green blocks inside of the indicator that I'm creating.
And they are actually created by a single finger pattern here. This engulfing candle, that is engulfing a previous previous green candles. So when we're in a uptrend that the last green candle is considered where the the order block would be made and that is confirmed by a red candle moving into a bearish zone. So for instance, here, we have one which is absolute perfect. We are in Goldfinger, the candle. Here we have a block that has been made.
Now. These are actually made very much in the same sort of way. As one of my favorite patterns, which would be an ABC, very much small very, very, very small. What patterns here.
They are actually where you can. Imagine banks are actually coming into the market institutions and they're wishing to grab all the liquidity from above here and he all of these stop losses, Etc. All Above here.
They have wishing to clicked before. Pushing the A market further down and that creates any order block, this red box here and like I was, like I said, with the inefficiencies earlier, they work a bit like making it. The bank's institutions have to come back to these zones to come and pick up the money. They've left behind because they've actually had to push the market up to get the liquidity from here, before pushing it down at a lightning speed. Tonight is created these inefficiencies here, which have orders left over, which we call order blocks.
So, now let's go and have a look at a recent example of an order block, and how it would of worked. As you can see here. We have our banks. It coming in at this area here. They have pushed the price up to go to get all the liquidity out above at this previous candle here, a engulfing pattern.
So where they push price, right? Down, leaving orders here that they will go. Fact before we pushing price back down, once we come and mitigate and to touch the order area that order block here. We actually expect either price at to push it back up, or push back down in the prettier back as before. This happens quite often in the market. As you can see. There's quite a few of them.
Very Frank tile. You have to keep an eye on all time frames while but doing this because of the way the market Works, something that could be an order block on a 4. Our could be a smaller broad dog on a one-hour, and couldn't be mitigated on a lower time frame. 531 00:18:37,700 --> 00:18:37,699 So,
you have to look at all of those kind of things. They kind of things. I'm going to have to work out how to code as I go along. I will go into a better explanation of how these, all the blocks are actually created in a later date with. And whilst I'm creating strategies.
What I'll do is I'll back test as many kinds of strategies and algorithms as possible to find that the best entries. Thanks to these rare order blocks also be doing the Efficiencies there in there as well. You can hardly see them there. The yellow blocks, just here. There's one here. I believe there's one or two, just there.
As you can see. There's quite a few of them all over the place. These and in efficiencies in the market where rice it will move back and feel. As you can see. There's just one here. I believe we're boom from various pressure was so high that we eventually had to come back and Bill that here.
So that would have been a absolutely perfect entry as well or Confluence of for our entry. He's so to summarize very quickly. As I said, these order blocks, which is going to be the bread and butter of this. And found. This strategy are going to are made out of banks or institution manipulation. Whales, whatever you want to call.
It are pushing price up to grab a liquidity that liquidity above at that price and then push prices down at lightning speeds leaving orders behind that they have to come and collect as you can see a bit later and then they push price either back. The same direction or against the against the trend, depending on what trend that they are pushing the market towards. Anyway, guys, I hope you enjoyed that. I hope that it helps you to understand how institutions are actually trading smart money.
The money that kind of think I will be diving a lot deeper into this one and be building a trading strategy, hopefully for multiple platforms so that we can find confidence maybe in python or just in tradingview adding more and more. More confluent. So to this trading strategy looking for exits and entries, stop losses, how to set those kind of things. And I'm going to be looking at that through code.
I'm going to be coding the strategy so that everybody can add this to their trading stretcher tradingview and trade, hopefully with bots in the future. Apparently 75 percent of All American trades are now made by algorithms. So a lot of this is already done and by the institutions on algorithms, so that's something that I want to implement. A lot more into my trading strategies.
Has this kind of trading strategy here. It helps me to also understand why I've been trading. Those ABC patterns for so long. As you can see, thanks to the Wycoff and patterns and things like that. You can actually see why those ABCs are actually forming.
And the great thing is is hopefully we'll be able to get less trap to buy some of these fake outs before, actually, that ABC shooting offer to the Moon. Anyway guys. I hope you enjoyed as I said, if you did, please don't forget to give it a good old thumbs up, and don't forget to subscribe. I will continue this kind of trading strategy throughout the next couple of days, and I'll add a couple of other trading strategies in between, just in case, this isn't the one that you're looking for. Have a great day.
Have a great weekend and I will see you on Monday. Take care. Keep safe and have a good one.
Goodbye. He's gone to a new strategy. He'll be back in.
Just five minutes if he doesn't run into anybody. Ox there will be new strategies. Come on, David.
2022-03-28 16:41
