Greatest Smart Money Concepts Indicator on TradingView (In-Depth Tutorial)

Summary

The video introduces a top-ranking, free, open-source indicator for traders based on smart money concepts. It simplifies market structure analysis, trend detection, and order block identification. The indicator highlights key features like change of character, break of structure, and liquidity zones, enhancing trading strategies. The video also emphasizes the importance of using this tool in conjunction with other analysis for effective trading, showcasing practical trade setups and suggesting premium features for advanced insights.

Takeaways

• 🚀 The Smart Money Concepts indicator is a popular tool on TradingView, ranking in the top 10 indicators of all time.
• 📊 It simplifies market analysis by combining essential elements of smart money concepts into a single, free, and open-source indicator.
• 📈 Market structure is a key feature for detecting trend changes and validating existing trends through higher highs and lows.
• 🔍 Change of character (CH) labels in red indicate a trend reversal, while break of structure (BOS) labels in green signify a continuation of the trend.
• 🔄 Larger solid lines represent swing structures, which can help determine the significance of a directional change in the market.
• 📍 The indicator can detect equal highs and lows, and major price points to locate areas of resting liquidity.
• 📉 Order blocks highlight significant buying and selling activity, with bullish blocks in blue and bearish in red, useful for trade exits or taking profits.
• 💰 Fair value gaps represent price imbalances that the market gravitates towards, useful for finding precise entry points in a trade.
• 📊 The premium and discount feature helps in detecting regions of supply and demand, guiding traders on optimal entry points for trades.
• 📝 Traders should use the indicator in conjunction with other analysis tools and not rely solely on change of character or break of structure points for trade execution.
• 🌐 The Smart Money Concepts indicator is available for free on five different platforms and can be further enhanced with the premium version for additional features.

Q & A

What is the primary function of the Smart Money Concepts indicator?

The Smart Money Concepts indicator is designed to help traders perform analysis on market structure, order blocks, and liquidity concepts, enabling them to detect trend changes and validate existing ones using price action.

How does the indicator represent trend changes in an uptrend?

In an uptrend, the market typically makes higher highs and higher lows. The indicator plots a red 'CH' label for 'Change of Character' when a higher low point is broken, signaling a change in market direction.

What does the 'BOS' label signify in the indicator?

The 'BOS' label stands for 'Break of Structure' and is plotted when the previous higher high point is broken, signifying that the market trend is continuing.

How can the indicator's internal structures be nested within larger structures?

Internal structures can exist within larger swing structures, which are represented by solid lines. These larger structures can help determine the significance of a directional change and provide context for the internal changes.

What is the purpose of detecting equal highs and lows in the indicator?

Equal highs and lows are used to locate areas of resting liquidity. Traders can use these levels to identify potential support or resistance zones where the price may struggle to move in a particular direction.

How does the indicator use order blocks to assist traders?

Order blocks represent areas of significant buying and selling activity. When the price returns to these levels, there is often a strong reaction, which traders can use to take profit or exit trades.

What are fair value gaps and how do they help in trading?

Fair value gaps are price imbalances that need to be filled; the price will gravitate towards them. They can be used to find more precise entry points within a retracement for trading.

What is the significance of the premium and discount feature in the indicator?

The premium and discount feature helps detect regions of supply and demand in the market. It can guide traders on whether to enter a trade or wait for a pullback to the discount zone, potentially saving them from getting stopped out in a retracement.

How should traders use the Smart Money Concepts indicator in conjunction with other tools?

Traders should use the Smart Money Concepts indicator alongside their analysis and other complementary indicators before executing any trade, rather than blindly taking trades at change of character or break of structure points.

What is the Money Flow Profile and how does it complement the Smart Money Concepts indicator?

The Money Flow Profile is a volume analysis tool that shows where the most volume is and whether traders have more bullish or bearish sentiment within a region. It complements the Smart Money Concepts indicator by providing insights into the strength and direction of market sentiment.

How can users access the Smart Money Concepts indicator and its premium version?

Users can access the Smart Money Concepts indicator for free within the Lux Algo Library by searching for it. The premium version, which includes additional features and improvements, can be tried for 30 days at Lux Algo's website.

Outlines

00:00

📊 Introduction to Smart Money Concepts Indicator

This paragraph introduces a top 10 trading indicator on TradingView, the Smart Money Concepts Indicator, which is free and open source. It simplifies market analysis by combining essential smart money concepts into a single tool. The indicator uses market structure to detect trend changes and validate existing ones, with labels like 'Change of Character' (CH) for trend reversals and 'Break of Structure' (BOS) for trend continuation. It also identifies equal highs and lows, major price points, and resting liquidity areas. The indicator includes order blocks to signify significant buying and selling activity and fair value gaps for more precise trade entries. It features a premium and discount zone to detect supply and demand regions, helping traders avoid entering trades at unfavorable times. The paragraph emphasizes the importance of using the indicator alongside other analysis tools for effective trading.

05:01

🚀 Advanced Trading Techniques with Smart Money Concepts

The second paragraph delves into advanced trading strategies using the Smart Money Concepts Indicator. It discusses the importance of understanding market structure at different timeframes and how to interpret internal and swing structures for more significant trend changes. The paragraph also highlights the use of volume analysis with the Money Flow Profile to gauge bullish or bearish sentiment within a price region. It advises traders to wait for price reactions at significant levels before executing trades. Furthermore, the paragraph mentions the premium version of the indicator, which includes enhanced features like volumetric data, multi-timeframe order blocks, trend lines, chart patterns, and various types of imbalances. The premium version is available for a 30-day trial at Lux Algo, and the paragraph concludes by inviting viewers to access the free version of the indicator through the Lux Algo Library and to join the community for feedback.

Keywords

💡Smart Money Concepts Indicator

The 'Smart Money Concepts Indicator' is a tool developed for traders to analyze market trends and structures. It is defined as the first and most complete indicator of its kind, ranking within the top 10 indicators on TradingView. The indicator simplifies the analysis of market structure, order blocks, and liquidity concepts, offering a comprehensive approach to trading strategy. It is used in the script to illustrate how traders can outsmart 'dumb money' by leveraging smart money concepts.

💡Market Structure

Market Structure is a concept used to detect trend changes and validate existing ones through price action. In the script, it is explained that an uptrend is characterized by higher highs and lows, and a change in market direction is indicated when a higher low point is broken, signified by a 'Change of Character' label. This concept is integral to understanding the video's theme of market analysis and is used to identify significant trend shifts.

💡Change of Character (CH)

'Change of Character' or 'CH' is a label plotted by the indicator when a higher low point in an uptrend is broken, signaling a potential change in market direction. It is a key concept in the video, illustrating the dynamic nature of market trends and the importance of recognizing these shifts for effective trading.

💡Break of Structure (BOS)

The 'Break of Structure' or 'BOS' label is used when the previous higher high point is broken, indicating that the market trend is continuing. This concept is highlighted in the script to emphasize the importance of recognizing both the continuation and change of market trends for successful trading strategies.

💡Swing Structures

Swing Structures are larger patterns within the market that can be used to determine the significance of directional changes. In the script, they are described as solid lines that work similarly to internal structures but on a larger scale. Understanding swing structures is crucial for assessing the importance of trend changes and making informed trading decisions.

💡Resting Liquidity

Resting Liquidity refers to areas in the market where there is significant buying and selling activity, often at equal highs and lows. The script explains how these levels can be used by traders to locate areas where the price may struggle to move in a particular direction, providing a context for potential trades.

💡Order Blocks

Order Blocks are areas of significant buying and selling activity within the market. The indicator shows bullish order blocks in blue and bearish in red, which can be used by traders to take profit or exit trades. This concept is central to the video's theme of leveraging market activity for trading advantages.

💡Fair Value Gaps

Fair Value Gaps represent imbalances within the price that need to be filled, with the price gravitating towards them. In the script, these gaps are mentioned as tools for finding precise entry points for trades within a retracement. They are an essential part of the indicator's functionality for enhancing trading precision.

💡Premium and Discount Zones

Premium and Discount Zones are features of the indicator that help detect regions of supply and demand in the market. The script uses these zones to illustrate how traders can identify optimal entry and exit points for trades, avoiding getting stopped out in retracements.

💡Money Flow Profile

The Money Flow Profile is a volume analysis tool mentioned in the script, which not only shows where the most volume is but also indicates whether traders have more bullish or bearish sentiment within a region. This tool is used in the video to determine the reaction of the price to certain levels, providing a deeper understanding of market sentiment.

💡Volumetric Data

Volumetric Data refers to the volume of trading activity, which is a critical aspect of market analysis. In the context of the script, it is used to enhance the order blocks feature, providing a more detailed understanding of market dynamics and helping traders make more informed decisions.

Highlights

Development of the first and most complete smart money Concepts indicator.

The indicator ranks within the top 10 on TradingView.

Traders can perform analysis on market structure, order blocks, and liquidity concepts with a single free and open-source indicator.

Market structure is used to detect trend changes and validate existing trends.

Change of character (CH) and break of structure (BOS) labels indicate market direction changes.

Swing structures help determine the significance of directional changes.

Detection of equal highs and lows and major price points for locating resting liquidity areas.

Order blocks identify significant buying and selling activity areas in the market.

Fair value gaps indicate price imbalances that need to be filled.

Premium and discount features help detect regions of supply and demand.

Customization options allow traders to adjust the indicator to fit their trading style.

The indicator should be used alongside analysis and other indicators for trade execution.

Volume analysis using the money flow profile for determining trade entry points.

The smart money Concepts indicator is available for free on five different platforms.

Common issue with candle coloring on TradingView and its solution.

Premium version of the indicator includes improved features like volumetric data and multi-timeframe order blocks.

The indicator is part of the Lux Algo Library and can be accessed for free.

Invitation to join the Discord Community for feedback and further discussion.

Transcripts

we developed the first and most complete

smart money Concepts indicator which

became so popular that it now ranks

within the top 10 indicators of all time

on trading view by taking the most

essential parts of smart money Concepts

Traders can finally perform analysis on

Market structure order blocks and

liquidity concepts with a single

indicator that is completely free and

open source today we'll break down

exactly how this gem works and at the

end of the video show you the best

features and setups to use in real

markets to easily outsmart dumb money oh

you almost had it you got to be quicker

than that at the foundation of this

indicator is Market structure structure

is used as an easy way to detect Trend

changes and validate existing ones using

price action in an uptrend the market

makes higher highs and higher lows but

if a higher low point is broken a red CH

label which stands for change of

character is plotted and this tells us

the market Direction has changed however

if instead of breaking that higher low

point the previous higher high point is

broken toen it signifies that the market

trend is continuing and a BOS label

which stands for break of structure will

be plotted these labels are called

realtime internal structures however

these internal structures often exist

within larger ones if you zoom out

you'll see larger solid lines

representing swing structures these

swing structures work the same as

internal ones but can be used to

determine how significant a directional

change may be for example you can have

an internal bearish change of character

created but but if it's within a larger

bullish swing structure it could be a

sign that the trend change might not be

as significant and you may want to be

cautious if holding trades for a long

time in that direction in addition to

structure the indicator can also detect

equal highs and lows and major price

points such as daily weekly and monthly

levels Traders will often use these

levels together to locate areas of

resting liquidity in this example an

equal low is detected suggesting that

the price is struggling to go lower now

we can see that the price then swept

that daily low which might have been a

pull on liquidity to go higher it's Then

followed by a change of character at

which point could then be traded into

this order block above which also brings

us to the next major part of this

indicator order blocks and fair value

gaps order blocks are areas in the

market where there is significant buying

and selling activity and when the price

returns to these levels there's often a

strong reaction the indicator will show

you bullish order blocks in blue and

bearish in red and you can use these

areas to take profit or exit your trades

just like with Market structure you can

detect more significant blocks by

enabling swing order blocks a Trader may

choose to use internal order blocks to

enter trades and more significant swing

order blocks as areas to exit fair value

gaps can also be enabled and these are

imbalances within the price that needs

to be filled price will gravitate

towards them and they're often used to

find more precise areas within a

retracement to enter a trade the

indicator also includes a premium and

discount feature which can help detect

regions of supply and demand in the

market so if you're thinking about

taking a Buy trade but the price is

above the equilibrium you may want to

wait for a pullback to the discount Zone

before entering saving you from getting

stopped out in the retracement these are

the major features within this indicator

and many of these features can be

adjusted so Traders can find just the

right fit for their trading style since

the release of this indicator we've seen

tons of videos and users attempting to

use it by blindly taking trades at

change of characters or break of

structure points if you blindly execute

at these levels you will inevitably fail

as a Trader Traders are supposed to use

this tool alongside their analysis and

other complimentary indicators before

executing any trade so with that said

let's explore some of our favorite trade

setups using this indicator in this

example notice how the price is

currently bearish we know this from

seeing a bearish change of character and

a bearish break of structure label

however if we zoom out we also see that

the swing structure is bullish this

could indicate that the current internal

structure change may be a retracement of

a much larger move but if it is a

retracement when and where is it likely

to reverse and continue bullish let's

perform some volume analysis on this

entire structure to determine that now

any volume profile tool will work but

this volume tool not only shows where

the most volume is but also whether

Traders have more bullish or bearish

sentiment within that region this

indicator is the money flow profile and

it's completely free now we see that

majority of trading happened within this

price level and also notice how there is

significantly more bullish sentiment

within that price region now as price

trades into this level we don't just

execute we wait to see its reaction to

that level and now that we're seeing

larger bullish candles rejecting this

level and also notice that price has

swept the previous week's low we now

have quite a number of reasons to expect

a bullish move from this region in this

other example notice how the structure

is bearish and the price has retraced

into the swing order block now if we

enable premium and discount zones we can

see the price is above the equilibrium

which is where you want it to be for

sell trades we also see that there was a

bearish equal High plotted which is the

first sign of a possible reversal if we

now enable fair value gaps we can set a

limit order at that fair value Gap since

the structure is still bearish to get an

amazing cell trade the smart money

Concepts indicator is now fully

available for free on five different

platforms if using it on trading view a

common issue with this indicator is that

when candle coloring is enabled it only

changes the colors if the indicator is

selected an easy way to solve this issue

is to move the indicator above the

candles in the layer panel this issue

was fixed in the premium version of this

indicator the price action Concepts

toolkit we also improved the order

blocks to provide volumetric data

multi-timeframe order blocks trend lines

chart patterns several different types

of imbalances and much more this version

of the indicator is constantly updated

as we integrate new features based on

user feedback and you can try it for 30

days at Lux algo.com we hope you enjoyed

this video and now have a better

understanding of how to use this

indicator you can get access to this

indic indicator for free within the Lux

algo Library by searching smart money

Concepts let us know in the comments

what indicator you would like us to

cover next and don't forget to join our

Discord Community to provide feedback

thank you for watching and until next

time