HOW TO TRADE SMC

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Market Analysis Using Smart Money Concepts

Overview

  • Asset: US 100 Cash CFD
  • Timeframe: 5-minute chart

Current Market Structure

  • Trend: The market is exhibiting a clear downtrend characterized by lower highs and lower lows, indicating that sellers are in control.

Key Levels

  1. Order Blocks (OB)
  • Daily OB: Located near the top of the chart, this area represents institutional interest for potential buying. Watch for price action around this zone as it may indicate a reversal.
  • 5-Minute OB: Close to the current price action, this order block is essential for identifying short-term buying opportunities if the price retraces.
  1. Fair Value Gaps (FVG)
  • There are two identified FVGs:
  • FVG at the lower levels: This gap may act as support as price pulls back, providing a potential area for price discovery.
  • FVG in the middle range: This may attract price back to fill where there was a fast movement away from, offering more trading opportunities.
  1. Liquidity Areas
  • Upside Liquidity: The marked area indicates potential targets where price may seek liquidity, likely above resistance levels.
  • Observing where buy orders (liquidity) are accumulated can provide insights for potential reversals or continuations.

Entry and Exit Points

  • Buy Entry: Consider entering long positions if price approaches the 5-minute OB and shows signs of reversal (e.g., bullish candlestick formations).
  • Sell Entry: Look to enter shorts if price fails to hold above the daily OB and begins to show bearish momentum.
  • Targets: Set profit targets at FVG levels and structural highs/lows,


HOW TO TRADE SMC

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