Hi
Traders approach the market in various ways, each with a unique perspective dependent on their own viewpoint. Among the many strategies, each has its strengths and drawbacks. Some strategies, like the three drives or dragon pattern trading, are not as widely mentioned or popular.
However, one strategy worth mentioning is the smart money concept strategy. This strategy believes that the market is not driven by news, but rather by institutions and market makers. It aims to explain why reversals occur and how these reversals can benefit market makers or institutions at the expense of retail traders. The strategy is based on the idea that protecting one's stop loss and capitalizing on the moves made by market makers or institutions can result in significant gains for retail traders.
The smart money concept strategy emphasizes capital protection since it is rooted in fear. However, this fear can also work against retail traders. Market makers and institutions can exploit the smart money concept strategy to their advantage. Consequently, the smart money concept strategy is best suited for strategically placing a stop loss rather than trading the market for profit.
Just as the supply and demand approach may not accurately predict momentum breakouts, the smart money concept strategy may not effectively capture strong momentum. Acknowledging that no single strategy is foolproof does not mean that one should ignore the drawbacks of a strategy and become indifferent. In the case of the smart money concept strategy, it is most effective when used for stop loss placement rather than profit targeting.
Here is an example above how SMC and SND may view the market for entry and potential targets. Keep in mind this is just an illustration.
As you can see, the SMC aims to protect the stop-loss for higher profits, while SND is more interested in confirming a momentum zone and then reacting.
Traders approach the market in various ways, each with a unique perspective dependent on their own viewpoint. Among the many strategies, each has its strengths and drawbacks. Some strategies, like the three drives or dragon pattern trading, are not as widely mentioned or popular.
However, one strategy worth mentioning is the smart money concept strategy. This strategy believes that the market is not driven by news, but rather by institutions and market makers. It aims to explain why reversals occur and how these reversals can benefit market makers or institutions at the expense of retail traders. The strategy is based on the idea that protecting one's stop loss and capitalizing on the moves made by market makers or institutions can result in significant gains for retail traders.
The smart money concept strategy emphasizes capital protection since it is rooted in fear. However, this fear can also work against retail traders. Market makers and institutions can exploit the smart money concept strategy to their advantage. Consequently, the smart money concept strategy is best suited for strategically placing a stop loss rather than trading the market for profit.
Just as the supply and demand approach may not accurately predict momentum breakouts, the smart money concept strategy may not effectively capture strong momentum. Acknowledging that no single strategy is foolproof does not mean that one should ignore the drawbacks of a strategy and become indifferent. In the case of the smart money concept strategy, it is most effective when used for stop loss placement rather than profit targeting.
Here is an example above how SMC and SND may view the market for entry and potential targets. Keep in mind this is just an illustration.
As you can see, the SMC aims to protect the stop-loss for higher profits, while SND is more interested in confirming a momentum zone and then reacting.