Smart Money Trading Guide
Master the institutional trading strategies that power QuantumBip's signals
📚 What You'll Learn
This guide explains the Smart Money Concepts (SMC) methodology that powers QuantumBip. Learn how institutional traders think and how to identify high-probability setups like the professionals.
1 What is Smart Money?
"Smart Money" refers to institutional traders—banks, hedge funds, and large financial institutions—who move markets with massive capital. Unlike retail traders, they leave footprints in price action that can be identified and traded.
❌ Retail Mindset (Avoid)
- • Trading support/resistance lines
- • Buying breakouts (often fakeouts)
- • Following indicator signals blindly
- • Trading against the trend
- • Chasing price movements
✓ Institutional Mindset (Follow)
- • Trading from supply/demand zones
- • Waiting for liquidity sweeps
- • Following order flow and structure
- • Trading with the trend
- • Patient entries at discount/premium
2 Market Structure
Understanding market structure is the foundation of SMC. It tells you the current trend direction and helps identify potential reversal points.
📈 Bullish Structure
- • Higher Highs (HH) and Higher Lows (HL)
- • Each swing low is protected
- • Look for LONG opportunities
- • Break of Structure (BoS) confirms continuation
📉 Bearish Structure
- • Lower Highs (LH) and Lower Lows (LL)
- • Each swing high is protected
- • Look for SHORT opportunities
- • Break of Structure (BoS) confirms continuation
🔑 Key Concept: Change of Character (CHoCH)
A CHoCH occurs when price breaks a significant swing point against the trend, signaling a potential reversal. This is where Smart Money often enters positions.
3 Order Blocks
Order Blocks are institutional footprints—areas where Smart Money placed large orders. Price often returns to these zones before continuing the trend.
🟢 Bullish Order Block
The last bearish candle before a strong bullish move that breaks structure.
How to trade: Wait for price to return to the OB zone, then look for bullish confirmation to go LONG.
🔴 Bearish Order Block
The last bullish candle before a strong bearish move that breaks structure.
How to trade: Wait for price to return to the OB zone, then look for bearish confirmation to go SHORT.
4 Fair Value Gaps (FVG)
A Fair Value Gap is an imbalance in price—an area where buying and selling didn't occur equally. Price tends to return to "fill" these gaps before continuing.
How FVGs Form
Look for a 3-candle pattern where the wicks of candles 1 and 3 don't overlap, creating a gap.
💡 Trading FVGs
In a bullish trend, look for price to retrace into a bullish FVG before continuing up. This is an ideal entry point with defined risk (below the FVG).
5 Liquidity Concepts
Liquidity is where stop losses and pending orders cluster. Smart Money needs liquidity to fill their large positions, so they often manipulate price to grab it.
📍 Buy-Side Liquidity (BSL)
Stop losses from short sellers sitting above swing highs. When price sweeps above these levels and reverses, Smart Money is selling to those buyers.
📍 Sell-Side Liquidity (SSL)
Stop losses from long traders sitting below swing lows. When price sweeps below these levels and reverses, Smart Money is buying from those sellers.
⚠️ Stop Hunt Warning
Before major moves, price often "hunts" stops by briefly breaking key levels. This is why placing stops exactly at swing highs/lows is risky. Give your trades room to breathe.
6 Putting It All Together
The highest probability setups combine multiple confluence factors. Here's the QuantumBip approach:
🎯 High-Probability Setup Checklist
- 1Identify Trend: Determine bullish or bearish market structure on higher timeframe
- 2Locate POI: Find Order Blocks and Fair Value Gaps in discount (for longs) or premium (for shorts)
- 3Check Liquidity: Is there liquidity above/below that could get swept before the move?
- 4Wait for Entry: Drop to lower timeframe and wait for CHoCH or BoS confirmation
- 5Risk Management: Place stop below/above the POI, target opposing liquidity
QuantumBip automates this entire process, scanning multiple timeframes 24/7 and alerting you when high-confluence setups appear.