📖 Financial Lexicon Term
What is Smart Money Concepts (SMC)?
A trading methodology that attempts to track the algorithmic footprints of institutional traders (banks, hedge funds) using price action.
Detailed Explanation
SMC is a modernized approach to supply and demand trading. It operates on the theory that 'Smart Money' manipulates retail liquidity (stop losses) before moving the market in the intended direction. Key concepts include Order Blocks, Liquidity Sweeps, and Break of Structure (BOS).
💡 Practical Trading Example
An SMC trader looks for price to sweep retail stop losses below a double bottom before entering a long position.