PHINEAS ACADEMY

THE ART OF TRADING SMART MONEY

TRADING PLAN

1. Specify times to trade.

2. Specialize

RISK REWARD

*Risk certain amount per trade

*Always add stop losses

*Have a certain number of trades you take per day.

*You can set that 2 losses or 2 wins per day you are done.
PSYCHOLOGY IN FOREX

1. Understanding fear

2. Overcoming greed

3. Setting rules

4. Conducting research and review

5. Avoid regret

6. Be disciplined

7. Be flexible

8. Never stop learning

9. Avoid changing directions

RULES FOLLOWED BY PROFESSINAL TRADERS

1. Stick to your discipline

2. Loose the crowd

3. Engage trading plan

4. Hard work, don’t cut the corners

5. Avoid obvious setups

6. Don’t break your rules

7. Cultivate succeed in the long run

8. Organize your personal life

9. Don’t try to get even, revenge trading is a recipe for disaster

10. Make peace with losses

SMART MONEY CONCEPTS
INTRODUCTION

As you no doubt already know, over 90% of forex traders lose money overall and
end up quitting.

With the market being a zero-sum game, this means that just 10% of forex traders
are profitable, taking money from the losing 90%.

In an environment such as this, it’s hard to find success, but by understanding what
the smart money is doing, you’re able to ride on their coattails toward success.

* But forex trading is primarily a game of probabilities and trading a strategy

(smart money concepts) that aligns your thinking with those with the ability to
move markets definitely pushes the odds further in your favor.

About Smart money

1. MARKET STRUCTURE

; Uptrend

; Downtrend

; Consolidation
 Consolidation

Consolidation is a technical analysis term used to describe a stock's price movement within a
given support and resistance range for a period of time.

2. EXPANSION AND RETRACEMENT

EXPANSION

Occurs when there is an impulsive movement towards a direction.

RETRACEMENT

Is the correction movement after an impulsive move.

3. ORDER BLOCKS (OB)

The market returns to those candles, and they are never violated.

TYPES OF ORDER BLOCKS

: Bullish order block

: Bearish order block

BULLISH ORDER BLOCK

: Is the last candle before the bullish movement, which breaks the market structure higher.

: Represents a high possibility of holding the price when it returns to it.

BEARISH ORDER BLOCK

; Is the last bullish candle before the bearish movement that breaks the market structure lower.

: Represents a high possibility of holding the price when the price returns to it.

CHARACTERISTICS OF TRADABLE ORDER BLOCKS

1. OB SHOULD BE AT/NEAR SUPPORT/RESISTANCE

2. OB SHOULD BE AT/NEAR FLIP ZONE (Good for reversal entries)
3. OB MUST BREAK THE MARKET STRUCTURE [BMS]
4. IMBALANCE

5. BULLISH OB ABOVE EQH.

6. BEARISH OB BELOW EQL.
HOW TO TRADE ORDERBLOCKS

1. STOP HUNT, BREAK OF MARKET STRUCTURE AND RETURN TO ORDER BLOCK

(SH, BMS AND RTO)

1. Banks take liquidity (SH)

*Stop Hunt (SH): Hunting for stop losses of retail traders.

2. There is BMS confirming SH

*BMS is caused by impulsive move from the order block.

3. Price return to OB

*The price return to an order block in a correction form (retracement)

Using BuOB
Example 1

*After marking Stop Hunt, Break of Market Structure and Order Block ,we wait for the market
to return to our order block so that we enter our buy signal.

*Normally our TP1 is the first high.

Example 2

Same as setup 1, firstly,

* Identify the SH and OB

*Then break of market structure

*Wait for RTO, so that we can place our orders

2. SHIFT OF MARKET STRUCTURE +BREAK OF MARET STRUCTURE + RETURN TO ORDER

BLOCK

(SMS +BMS+RTO)

1. Price fails to break a higher high or higher low.

2. There is break of market structure (BMS), Confirming SMS

3. The price returns to OB

USING BEOB

Example 1
Example 2

Using BuOB
Example 1
Example 2

3.BREAKER BLOCKS

We have two types of breaker blocks.

*Bullish breaker block

*Bearish breaker block

HOW TO TRADE BEARISH BREAKER BLOCK AND BULLISH BREAKER BLOCK

BEARISH BREAKER BLOCK

*A bearish breaker block occurs when price creates a lower low ,collecting liquidity pools by
taking out the previous low then pull up and collect buy side liquidity on the nearest high then
price will come back later to retest the previous violated high and continue to go down. This
happens to close all liquidity voids created, and our main goal is to wait for a pullback to the
previous high and once we see a good rejection, we make our buy entries.
BULLISH BREAKER BLOCK

A bullish breaker block occurs when price creates a higher high ,collecting all t he resting
liquidity pools on previous highs forming a higher high ,then price will drop and collect sell side
liquidity on previous lows and forms a lower low ,after that price will retrace up to the previous
violated low and retest then continue to drop ,that’s where we will take advantage of price and
sell short on the previously violated low.
4. ACCUMULATION, MANIPULATION AND DISTRIBUTION

(AMD)

HOW TO TRADE AMD

1.Accumulation: The price will be ranging

2.Manipulation: The price will break the range direction to trap traders (Because of liquidity)

3.Distribution: The price will go against the manipulation movement ,and here look to go
long/short by using (SH+BMS+RTO/SMS+BMS+RTO)

EXAMPLE 1
Example 2

5. LIQUIDITY

The liquidity is defined by the stop losses, where the stop losses exist is where the liquidity exist.

Smart money traders need to activate the stop losses of existing orders in the market so they can
place their positions in the market.

The banks manipulate the price because of liquidity.

TYPES OF LIQUIDITY

*Buy side liquidity (BSL)

*Sell side liquidity (SSL)

Forms of liquidity

1. Equal highs

2. Equal lows

4. Flip zones

5. Inducements

6.Trendline liquidity
*BSL:Stop losses of sell orders ,after the bsl is taken ,the market will reverse to the
downside ,because the banks use the BSL to place sell orders in the market.

*SSL: Stop losses of the buy orders, after the ssl is taken, the market will reverse to the upside
because banks use the SSL to place orders in the market.

STOP HUNT: Manipulation for liquidity.

SH is a movement used to neutralize liquidity (stop losses).Is a false breakout above or below the
zone where there is liquidity.

Demonstration
1. Buy side liquidity.

Buy side liquidity created by resistance zone .

Banks manipulate the price to collect BSL because banks use BSL to place sell orders.

Example 1
 Example 2

2.Sell side liquidity

Sell side liquidity is created by support level.

Banks manipulate the price to collect SSL because banks use SSL to place buy orders.

Example 1
Example 2

RS FLIP ZONES

RS FLIP (resistance turning into support)

Liquidity exists below this zone.

Example

How to trade RS flip?

After identifying the RS flip zone use an order block below the zone as your entry point.

SR FLIP ZONES
SR FLIP (support turning into resistance)

Liquidity also exists above this zone.

How to trade SR flip?

After identifying the SR flip zone, use an order block below the zone as your entry point.
INDUCEMENT

Accumulation of retailers in seek of liquidity.

Example 1
Example 2

IMBALANCES

Imbalances occurs when either buyers or sellers take control over a particular piece of price
action ,which will essentially leave gaps in the market that price will come back to in the future
to re balance the price.
HOW TO TRADE AN IMBALANCE
Example 2

6.ADDING CONFLUENCE

Confluence is particularly important because it increases the chances of winning trades. A trader
needs to have at least two factors of confluence to open a trade .

When the confluence exists, the trader becomes more confident on his setups.

Factors of confluence can be,

*Combining setups

*Refine high time frames key levels in lower time frames for entries

*In some cases, you can use trendlines to increase confluence.

Example 1

Example 2
ENTRIES

Understanding how Smart Money & Retail Traders participate in the market will help you to also
understand how to trade with Smart Money.

Types of entries

*Aggressive entries

*Confirmation entries

AGGRESSIVE ENTRIES

This is a risk entry that does not require any confirmation.

Identify an orderblock and wait for price (with pending order) to come back to it.
Example

2. CONFIRMATION ENTRY

This is conservative entry that require confirmation, especially from HTF (Must do Top-Down
Analysis ).

Identify POI on HTF & refine it to LTF.

Example
REMEMBER

*Having a great analysis doesn’t make you a great trader ,The execution part is more important
because that were you deal with emotions.

*So, you being a trader consist of being executing trades.

*Lastly consistency requires proper risk management.

Final Thoughts on Smart Money Trading

Becoming a consistently profitable forex trader is no easy feat.

But by understanding the concepts around smart money and then implementing trading strategies
to take advantage of what you’ve learned, you can help shift the odds in your favour.

PRACTICE! PRACTICE! PRACTICE!

THE END