Unlocking The SMT Trading Sequence (Smart Money Secrets)

Summary

This lecture explores Smart Money Techniques (SMTs) and their sequences to identify high-probability trading opportunities. The presenter explains how higher-timeframe order flow dictates market direction, while lower-timeframe SMTs create retracements that serve as precise entry points. By understanding when an SMT forms against the trend and when a counteracting SMT appears, traders can anticipate the end of retracements and align with the prevailing market bias. Using examples of bullish and bearish scenarios, the video emphasizes the importance of targets, liquidity zones, and intermarket relationships, demonstrating how the SMT sequence provides powerful insight into price movements and smart money behavior.

Takeaways

• 😀 Understanding SMT (Smart Money Trigger) sequences is crucial for identifying which trades will work and when an SMT will be false or used for retracements.
• 😀 Not all SMTs are important for trading—only a select few are significant and should be paid attention to.
• 😀 A monthly SMT indicates long-term bullish movement, and the presence of one helps predict price reaching all-time highs.
• 😀 Fridays typically fall into two scenarios: either the price moves against the week’s direction (if targets are met), or the price completes the week by hitting the target if not already achieved.
• 😀 Identifying the order flow on higher time frames is key to understanding when SMTs on lower time frames (like daily or 90-minute) are just temporary retracements.
• 😀 Retracements caused by SMTs, even when they go against the trend, provide entry opportunities as they eventually align with the primary order flow.
• 😀 To confirm when a retracement will end, wait for a new SMT in the direction of your target; this confirms that the retracement has concluded.
• 😀 SMTs should not be seen as an obstacle but as part of the sequence that can be used to gauge entry points, especially when the overall trend remains intact.
• 😀 In line with the order flow, even weaker SMTs (like 10-minute SMTs) can hold more power than stronger ones (like 90-minute SMTs), provided they align with the overarching trend.
• 😀 Liquidity drawing and bias are critical—always prioritize higher time frames over lower ones when deciding on trade direction, even if lower time frames suggest retracements.
• 😀 SMTs are not random; they follow a sequence that can be interpreted to predict when retracements will end, helping you make more informed and precise trading decisions.

Q & A

What does SMT stand for and why is it important in trading?

SMT refers to 'Smart Money Tool/Time' and is important because it shows the sequence of price movements that reveal where price is likely to go, helping traders identify key retracement and trend continuation points.

Why are not all SMTs equally important for trading decisions?

Not all SMTs are important because only certain SMTs align with higher time-frame order flow and significant targets, while others merely create minor retracements and do not influence the overall trend.

What are the two main scenarios for price movement on Fridays according to the script?

1) If weekly targets are reached, price may retrace against the week’s trend. 2) If weekly targets are not reached, price will continue the trend to complete the target.

How do lower time-frame SMTs, such as 90-minute or Asia SMTs, influence trading?

Lower time-frame SMTs often cause retracements against the main trend, providing potential entry points for traders, but they are secondary to the higher time-frame SMTs and overall order flow.

How can a trader confirm that a retracement caused by a lower time-frame SMT has ended?

A retracement ends when a new SMT forms in the direction of the main trend. Additional confirmation can be obtained through price action signals like CSD, breaker formations, or imbalance inversions.

Why is the higher time-frame order flow considered more powerful than lower time-frame SMTs?

Because higher time-frame SMTs dictate the overall market bias and targets, while lower time-frame SMTs only create temporary retracements that do not override the primary trend.

What is the practical entry strategy based on SMT sequences?

Traders should wait for retracements caused by lower time-frame SMTs against the main trend and enter when an SMT appears in line with the higher time-frame order flow, confirming the end of the retracement.

What role does news play in the SMT trading strategy described in the video?

News events can cause temporary price manipulations, creating retracements or sudden movements. Traders must wait for the retracement to align with the SMT sequence and order flow before entering.

How does the SMT sequence help in predicting all-time highs?

By tracking the formation of SMTs across multiple time frames and observing retracements, traders can anticipate when price will reach significant targets, such as all-time highs, with higher confidence.

Why should traders not be afraid of SMTs forming against their anticipated idea?

SMTs forming against the anticipated idea often only cause retracements, not trend reversals. Understanding the sequence allows traders to use these retracements as precise entry opportunities in the direction of the main trend.

What is the significance of observing CSD and breaker formations in relation to SMTs?

CSD (Closing Structure) and breaker formations act as confirmation signals that a retracement has ended and price is resuming the main trend, increasing the probability of a successful entry aligned with the SMT sequence.

How does the concept of imbalances relate to SMT trading?

Imbalances represent areas where liquidity has been taken and price is likely to react. In SMT trading, observing imbalances helps traders identify retracement zones and optimal entry points within the sequence.