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edited (9)

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Top 9 Smart Money Concepts in Trading

forexbee.co/smart-money-concepts

January 3, 2024

Introduction
Trading in the financial markets isn’t just about guessing; it’s about making informed
decisions. That’s where smart money concepts come in. These concepts are the
strategies used by experienced traders and big financial institutions. They help in
understanding market movements and making profitable trades.

In this guide, we’re going to make smart money concepts easy to understand and use. No
matter if you’re new to trading or have been at it for a while, these key ideas are
important. They’ll give you a clearer view of the market and help you trade more
effectively, just like the experienced traders.

What are Smart Money Concepts?


Smart money concepts are the tricks used by big, experienced traders and institutions in
the forex market. Think of them as the special moves used by the market’s big players to
make profits. Knowing these can help you understand the market better and improve your
own trading.

These concepts are important because they show you how the market really works.
They’re like a behind-the-scenes look at what drives prices up or down. By using these
concepts, you can make smarter trades, just like the pros.

Let’s check out the main smart money concepts:

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Smart Money
Concept Description Image

Order Blocks Finding where big traders are likely to buy or sell a
lot.

Fair Value Gaps Gaps that act as price magnets and are typically
filled.

Supply and Zones where price fills the pending orders of market
Demand Zones makers.

Change of When the market starts acting differently, signaling a


Character Trading possible trend change.

Break of Structure Points where the normal pattern of the market


changes.

Liquidity Pools Places where a lot of trading happens.

Stop-Loss When big traders make moves to trigger smaller


Hunting traders’ stop-losses.

False Breakouts Times when the market looks like it’s moving one way
but then goes the other way.

Kill Zones Times during the day when the market is buzzing
with activity.

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