Method

Smart money concepts, without the mystique

Four ideas do most of the work. The rest is decoration.

Smart money concepts has collected a lot of vocabulary. Strip the vocabulary away and
four ideas are left doing almost all of the work, and each one is a place on the chart
where orders are likely to be sitting. That is the whole thing.

The four that matter

• Order block. The last candle before
  price left in a hurry. That is where the size went in, and part of it did not get
  filled.
• Fair value gap. A hole where price
  moved too fast for one side to trade. Useful above about ten pips, noise below it.
• Previous day high and low. Stops sit on
  both sides of them, and everyone can see the same two lines.
• Liquidity. Not a mystery. It is where the stops are: above obvious
  highs, below obvious lows, at round numbers.

What makes them work, and what makes them useless

All four describe the same thing from different angles: a price where orders are
resting. They work when they mark a place price has not been yet. They are worthless
when they are drawn after the move, because on a finished chart every one of them looks
perfect.

That is the honest test for any of this, and it is why we mark ours on a live chart
while the session runs rather than in a screenshot afterwards. A level you only see
after the move proves nothing.

Two reasons beat one

A fair value gap on its own is a weak reason. So is an order block on its own. When
the gap sits inside the order block, and both sit at the previous day high, that is a
level. One reason is a shape. Two or three in the same place is where we actually take
something.

What it does not tell you

None of this tells you size, and none of it tells you when you are wrong. Those come
from the stop distance and your risk, and they matter more than
the entry does. A perfect order block entry with the wrong size is a worse trade than an
average entry with the right one.

It also does not tell you what the trade costs to hold. Spread and commission come
out of every one of these, and on gold that is not small. The
cost calculator works out your year.

See smart money concepts on the live chart

We run a live chart through every session with the levels marked on it, the zones shaded, and every order block and fair value gap labelled as it forms. Watch the live chart.

Every trade we close is published in pips on the results page, wins and losses both, with the date it closed and how far it ran. What your spread and commission take out of that is on the cost calculator.

Related: gold pip value · lot size calculator · break even stop · smart money concepts · trading hours · order block · fair value gap · PDH and PDL

Education only, not financial advice. Trading gold carries a high level of risk and past results do not predict future results.