SMC CONCEPT NOTES by:

TradeMaster Institute

Educational Trend Analysis Support and Resistance

The SMC Concept is specifically designed for structure mapping and the identification
of high-probability Order Blocks. Excelling in distinctly recognizing four types of Order
Blocks, it provides traders with a direct and efficient method to dissect market
movements and identify strategic entry points with precision.

🔶 Understanding Structure Mapping

This concept introduces a unique approach to analyzing market structure, focusing on
liquidity, which is termed 'Inducement.' Inducement is crucial for identifying key
structural markers in the market, such as Higher Highs (HH), Higher Lows (HL), Lower
Lows (LL), and Lower Highs (LH).

Inducement acts like a trap set near a supply or demand zone. It entices impatient
buyers or sellers into the market before the actual zone is reached, thereby creating
liquidity. For an inducement to be considered valid, it must represent a valid pullback.

A valid scenario occurs when the price sweeps or closes beyond the high or low of the
previous candle; in this case, the candle's color, whether bullish or bearish, is not
relevant, and both scenarios are considered valid. Inside bars are ignored as they do not
meet this criterion. The concept assists in this process by automatically highlighting
valid pullbacks with a distinctive gray round label.

This feature is not just a visual aid but also a crucial tool in effortlessly understanding
market movements, providing a clear visual representation of ongoing market trends.

🔶 Understanding How Order Block Works

Our concept incorporates four distinct types of Order Blocks, each designed for specific
roles in market analysis. Among these, the OB-IDM and OB-EXT are regarded as
high-probability Order Blocks, and our primary focus is on these two for market entry.

● IDM Order Block (OB-IDM): IDM Order block (OB-IDM) is basically the first Order
Block that shows up after the IDM level is passed. Think of it as the closest OB
you find below the current IDM.
● Extreme Order Block (OB-EXT): OB-EXT is the first and lowest Order Block that
you'll find between a Major Low and a Major High.
● Single Candle Order Block (SCOB): Single candle mitigation is a very powerful
way to add multiple entries in your winning trades.
● Smart Money Trap (SMT): The SMT consists of all the Order Blocks that lie
between the Extreme and OB-IDM. It acts as a cautionary signal, indicating
potential traps for Smart Money Concept traders. It is essential to recognize that
the SMT does not provide additional confirmation for trading. Instead, it
highlights areas where traders should exercise extra caution. Trading decisions
should be based on clear confirmations, such as inducements or liquidity
sweeps, rather than solely on the SMT.

🔶 How to Use the SMC Concept:

The True SMC Concept is designed to enhance your trading strategy by identifying key
order blocks and market signals. Below is a guide on how to utilize the various elements
of the True SMC Concept:

● OB IDM (Order Block Inducement):

○ Usage: This is a decisional order block crucial for identifying trade entries.
It is particularly effective for pinpointing potential reversal zones.
○ Alerts: Setting up alerts on OB IDM is recommended to be notified when
the price reaches this critical area, thus facilitating prompt and informed
trading decisions.
● OB-EXT (Extreme Order Block):
○ Usage: OB-EXT serves as an extreme and high-probability order block for
trade entries, ideal for identifying strategic entry points at potential
reversal points.
○ Alerts: Activating alerts on OB-EXT will keep you informed about price
approaches, aiding in the preparation of your trade setups.
● SCOB (Single Candle Order Block):
 ○ Usage: SCOB is ideal for scaling into a position. It should be employed for
adding to positions when the market reacts to OB IDM or OB-EXT,
indicating a potential reversal.
● SMT (Smart Money Trap):
○ Usage Caution: The SMT should be approached with caution as it
represents a potential trap. It is advised to avoid trading directly at SMT
zones. Instead, use these zones to gauge market sentiment and make
informed decisions.

This structured approach to using the True SMC Concept will help you in making more
precise and strategic trading decisions, enhancing your overall market analysis.

🔶 Example of Usage:
● Market Structure Diagram: This diagram illustrates the key structural markers in
the market such as Higher Highs (HH), Higher Lows (HL), Lower Lows (LL), and
Lower Highs (LH). It provides a visual guide to understanding the underlying
market structure.

● Example from a Real Chart: This chart is a prime example of how our concept is
used to dissect and highlight market structure in a live trading environment. It
vividly demonstrates the 'Inducement' concept in action, pinpointing key
 structural points like HH, HL, LL, and LH in real-time market trends.

● Valid Pullback Illustration: This image showcases a typical scenario where the
price sweeps beyond the previous candle's high or low, marking a valid pullback.
Notice the distinctive gray round label indicating the point of inducement.

● IDM Order Block (OB-IDM): This diagram illustrates the IDM Order Block
(OB-IDM), highlighting its position as the first OB following the IDM level. It
 represents the nearest OB below the current IDM level.

● IDM Order Block in Action: This real chart example showcases the OB-IDM in a
live market scenario, demonstrating how it appears and functions in practical
trading.

● Extreme Order Block (OB-EXT): The diagram depicts the OB-EXT, which is
identified as the first and lowest Order Block between a Major Low and a Major
 High.

● OB-EXT in Real Market: This chart example highlights the OB-EXT, showing its
position and significance in market analysis between major market points.

● Single Candle Order Block (SCOB): The accompanying chart demonstrates the
SCOB in a live trading environment, illustrating its effectiveness in trade
 optimization.

● Smart Money Trap (SMT): This real chart provides insight into how the SMT is
used in actual trading, marking areas for increased caution and illustrating its
role in a comprehensive trading strategy.

🔶 Conclusion
The True SMC Concept distinguishes itself from other market analysis tools through its
specialized focus on structure mapping and high-probability Order Blocks. Unlike
generic concepts, it expertly identifies and categorizes four distinct types of Order
Blocks, including IDM and Extreme Order Blocks, which are crucial for high-accuracy
trade entries. Its unique approach in analyzing market structure centers on 'Inducement,'
a key concept for pinpointing vital market structural markers. This feature, combined
with its ability to alert traders to both promising entry points and potential Smart Money
Traps, equips users with a comprehensive tool for a nuanced understanding of market
dynamics and strategic trade execution. Such targeted capabilities make the SMC
Concept an invaluable asset for traders seeking precision and efficiency in their market
analysis.