Price Action Smart Money Concepts [BigBeluga]

8월 19일

THE SMART MONEY CONCEPTS Toolkit

The Smart Money Concepts [BigBeluga] is a comprehensive toolkit built around the principles of "smart money" behavior, which refers to the actions and strategies of institutional investors.

The Smart Money Concepts Toolkit brings together a suite of advanced indicators that are all interconnected and built around a unified concept: understanding and trading like institutional investors, or "smart money." These indicators are not just randomly chosen tools; they are features of a single overarching framework, which is why having them all in one place creates such a powerful system.

This all-in-one toolkit provides the user with a unique experience by automating most of the basic and advanced concepts on the chart, saving them time and improving their trading ideas.

• Real-time market structure analysis simplifies complex trends by pinpointing key support, resistance, and breakout levels.
  
  
• Advanced order block analysis leverages detailed volume data to pinpoint high-demand zones, revealing internal market sentiment and predicting potential reversals. This analysis utilizes bid/ask zones to provide supply/demand insights, empowering informed trading decisions.
  
  
• Imbalance Concepts (FVG and Breakers) allows traders to identify potential market weaknesses and areas where price might be attracted to fill the gap, creating opportunities for entry and exit.
  
  
• Swing failure patterns help traders identify potential entry points and rejection zones based on price swings.
  
  
• Liquidity Concepts, our advanced liquidity algorithm, pinpoints high-impact events, allowing you to predict market shifts, strong price reactions, and potential stop-loss hunting zones. This gives traders an edge to make informed trading decisions based on liquidity dynamics.
  

🔵 FEATURES

The indicator has quite a lot of features that are provided below:

• Swing market structure
  
• Internal market structure
  
• Mapping structure
  
• Adjustable market structure
  
• Strong/Weak H&L
  
• Sweep
  
• Volumetric Order block / Breakers
  
• Fair Value Gaps / Breakers (multi-timeframe)
  
• Swing Failure Patterns (multi-timeframe)
  
• Deviation area
  
• Equal H&L
  
• Liquidity Prints
  
• Buyside & Sellside
  
• Sweep Area
  
• Highs and Lows (multi-timeframe)
  

🔵 BASIC DEMONSTRATION OF ALL FEATURES

1. MARKET STRUCTURE


The preceding image illustrates the market structure functionality within the Smart Money Concepts indicator.

➤ Solid lines: These represent the core indicator's internal structure, forming the foundation for most other components. They visually depict the overall market direction and identify major reversal points marked by significant price movements (denoted as 'x').

➤ Internal Structure: These represent an alternative internal structure with the potential to drive more rapid market shifts. This is particularly relevant when a significant gap exists in the established swing structure, specifically between the Break of Structure (BOS) and the most recent Change of High/Low (CHoCH). Identifying these formations can offer opportunities for quicker entries and potential short-term reversals.


➤ Sweeps (x): These signify potential turning points in the market where liquidity is removed from the structure. This suggests a possible trend reversal and presents crucial entry opportunities. Sweeps are identified within both swing and internal structures, providing valuable insights for informed trading decisions.


➤ Mapping structure: A tool that automatically identifies and connects significant price highs and lows, creating a zig-zag pattern. It visualizes market structure, highlights trends, support/resistance levels, and potential breakouts. Helps traders quickly grasp price action patterns and make informed decisions.


➤ Color-coded candles based on market structure: These colors visually represent the underlying market structure, making it easier for traders to quickly identify trends.


➤ Extreme H&L: It visualizes market structure with extreme high and lows, which gives perspective for macro Market Structure.


2. VOLUMETRIC ORDER BLOCKS

Order blocks are specific areas on a financial chart where significant buying or selling activity has occurred. These are not just simple zones; they contain valuable information about market dynamics. Within each of these order blocks, volume bars represent the actual buying and selling activity that took place. These volume bars offer deeper insights into the strength of the order block by showing how much buying or selling power is concentrated in that specific zone.

Additionally, these order blocks can be transformed into Breaker Blocks. When an order block fails—meaning the price breaks through this zone without reversing—it becomes a breaker block. Breaker blocks are particularly useful for trading breakouts, as they signal that the market has shifted beyond a previously established zone, offering opportunities for traders to enter in the direction of the breakout.

Here's a breakdown:

➤ Bear Order Blocks (Red): These are zones where a lot of selling happened. Traders see these areas as places where sellers were strong, pushing the price down. When the price returns to these zones, it might face resistance and drop again.
➤ Bull Order Blocks (Green): These are zones where a lot of buying happened. Traders see these areas as places where buyers were strong, pushing the price up. When the price returns to these zones, it might find support and rise again.


These Order Blocks help traders identify potential areas for entering or exiting trades based on past market activity. The volume bars inside blocks show the amount of trading activity that occurred in these blocks, giving an idea of the strength of buying or selling pressure.

➤ Breaker Block: When an order block fails, meaning the price breaks through this zone without reversing, it becomes a breaker block. This indicates a significant shift in market liquidity and structure.


➤ A bearish breaker block occurs after a bullish order block fails. This typically happens when there's an upward trend, and a certain level that was expected to support the market's rise instead gives way, leading to a sharp decline. This decline indicates that sellers have overcome the buyers, absorbing liquidity and shifting the sentiment from bullish to bearish.



Conversely, a bullish breaker block is formed from the failure of a bearish order block. In a downtrend, when a level that was expected to act as resistance is breached, and the price shoots up, it signifies that buyers have taken control, overpowering the sellers.

3. FAIR VALUE GAPS:
A fair value gap (FVG), also referred to as an imbalance, is an essential concept in Smart Money trading. It highlights the supply and demand dynamics. This gap arises when there's a notable difference between the volume of buy and sell orders. FVGs can be found across various asset classes, including forex, commodities, stocks, and cryptocurrencies.


FVGs in this toolkit have the ability to detect raids of FVG which helps to identify potential price reversals.


Mitigation option helps to change from what source FVGs will be identified: Close, Wicks or AVG.


4. SWING FAILURE PATTERN (SFP):
The Swing Failure Pattern is a liquidity engineering pattern, generally used to fill large orders. This means, the SFP generally occurs when larger players push the price into liquidity pockets with the sole objective of filling their own positions.

SFP is a technical analysis tool designed to identify potential market reversals. It works by detecting instances where the price briefly breaks a previous high or low but fails to maintain that breakout, quickly reversing direction.

How it works:

• Pattern Detection: The indicator scans for price movements that breach recent highs or lows.
  
• Reversal Confirmation: If the price quickly reverses after breaching these levels, it's identified as an SFP.
  

➤ SFP Display:
* Bullish SFP: Marked with a green symbol when price drops below a recent low before reversing upwards.
* Bearish SFP: Marked with a red symbol when price rises above a recent high before reversing downwards.


➤ Deviation Levels: After detecting an SFP, the indicator projects white lines showing potential price deviation:
* For bullish SFPs, the deviation line appears above the current price.
* For bearish SFPs, the deviation line appears below the current price.



These deviation levels can serve as a potential trading opportunity or areas where the reversal might lose momentum.

With Volume Threshold and Filtering of SFP traders can adjust their trading style:

• Volume Threshold: This setting allows traders to filter SFPs based on the volume of the reversal candle. By setting a higher volume threshold, traders can focus on potentially more significant reversals that are backed by higher trading activity.
  
  
• SFP Filtering: This feature enables traders to filter SFP detection. It includes parameters such as:
  

5. LIQUIDITY CONCEPTS:

➤ Equal Lows (EQL) and Equal Highs (EQH) are important concepts in liquidity-based trading.

• EQL: A series of two or more swing lows that occur at approximately the same price level.
  
• EQH: A series of two or more swing highs that occur at approximately the same price level.
  

EQLs and EQHs are seen as potential liquidity pools where a large number of stop loss orders or limit orders may be clustered. They can be used as potential reverse points for trades.



This multi-period feature allows traders to select less and more significant EQL and EQH:

➤ Liquidity wicks:
Liquidity wicks are a minor representation of a stop-loss hunt during the retracement of a pivot point:


➤ Buy and Sell side liquidity:

• The buy side liquidity represents a concentration of potential buy orders below the current price level. When price moves into this area, it can lead to increased buying pressure due to the execution of these orders.
  
  
• The sell side liquidity indicates a pool of potential sell orders below the current price level. Price movement into this area can result in increased selling pressure as these orders are executed.
  

➤ Sweep Liquidation Zones:
Sweep Liquidation Zones are crucial for understanding market structure and potential future price movements. They provide insights into areas where significant market participants have been forced out of their positions, potentially setting up new trading opportunities.



🔵 USAGE & EXAMPLES

The core principle behind the success of this toolkit lies in identifying "confluence." This refers to the convergence of multiple trading indicators all signaling the same information at a specific point or area. By seeking such alignment, traders can significantly enhance the likelihood of successful trades.

MS + OBs


The chart illustrates a highly bullish setup where the price is rejecting from a bullish order block (POC), while simultaneously forming a bullish Swing Failure Pattern (SFP). This occurs after an internal structure change, marked by a bullish Change of Character (CHoCH). The price broke through a bearish order block, transforming it into a breaker block, further confirming the bullish momentum.
The combination of these elements—bullish order blocks, SFP, and CHoCH—creates a powerful bullish signal, reinforcing the potential for upward movement in the market.
SFP + Bear OB


This chart above displays a bearish setup with a high probability of a price move lower. The price is currently rejecting from a bear order block, which represents a key resistance area where significant selling pressure has previously occurred. A Swing Failure Pattern (SFP) has also formed near this bear order block, indicating that the price briefly attempted to break above a recent high but failed to sustain that upward movement. This failure suggests that buyers are losing momentum, and the market could be preparing for a move to the downside.

Additionally, we can toggle on the Deviation Area in the SFP section to highlight potential levels where price deviation might occur. These deviation areas represent zones where the price is likely to react after the Swing Failure Pattern:



BUY – SELL sides + EQL

The chart showcases a bullish setup with a high probability of price breaking out of the current sell-side resistance level. The market structure indicates a formation of Equal Lows (EQL), which often suggests a build-up of liquidity that could drive the price higher.
The presence of strong buy-side pressure (69%), indicated by the green zone at the bottom, reinforces this bullish outlook. This area represents a key support zone where buyers are outpacing sellers, providing the foundation for a potential upward breakout.

EQL + Bull ChoCh

This chart illustrates a potential bullish setup, driven by the formation of Equal Lows (EQL) followed by a bullish Change of Character (CHoCH). The presence of Equal Lows often signals a liquidity build-up, which can lead to a reversal when combined with additional bullish signals.

Liquidity grab + Bull ChoCh + FVGs


This chart demonstrates a strong bullish scenario, where several important market dynamics are at play. The price begins its upward momentum from Liquidity grab following a bullish Change of Character (CHoCH), signaling the transition from a bearish phase to a bullish one.
As the price progresses, it performs liquidity grabs, which serve to gather the necessary fuel for further movement. These liquidity grabs often occur before significant price surges, as large market participants exploit these areas to accumulate positions before pushing the price higher.
The chart also highlights a market imbalance area, showing strong momentum as the price moves swiftly through this zone.


In this examples, we see how the combination of multiple “smart money” tools helps identify a potential trade opportunities. This is just one of the many scenarios that traders can spot using this toolkit. Other combinations—such as order blocks, liquidity grabs, fair value gaps, and Swing Failure Patterns (SFPs)—can also be layered on top of these concepts to further refine your trading strategy.

🔵 SETTINGS

• Window: limit calculation period
  
• Swing: limit drawing function
  
• Mapping structure: show structural points
  
• Algorithmic Logic: (Extreme-Adjusted) Use max high/low or pivot point calculation
  
• Algorithmic loopback: pivot point look back
  
• Show Last: Amount of Order block to display
  
• Hide Overlap: hide overlapping order blocks
  
• Construction: Size of the order blocks
  
• Fair value gaps: Choose between normal FVG or Breaker FVG
  
• Mitigation: (close - wick - avg) point to mitigate the order block/imbalance
  
• SFP lookback: find a higher / lower point to improve accuracy
  
• Threshold: remove less relevant SFP
  
• Equal H&L: (short-mid-long term) display longer term
  
• Liquidity Prints: Shows wicks of candles where liquidity was grabbed
  
• Sweep Area: Identify Sweep Liquidation areas
  

By combining these indicators in one toolkit, traders are equipped with a comprehensive suite of tools that address every angle of the Smart Money Concept. Instead of relying on disparate tools spread across various platforms, having them integrated into a single, cohesive system allows traders to easily see confluence and make more informed trading decisions.