53# Smart Money Concepts (SMC) Indicator Lux Algo TradingView, MT5, MT4

Submit by Dimitri 08/2024

The article provides an in-depth overview of the Smart Money Concepts (SMC) indicator, a powerful tool that offers real-time analysis of market structure and key price action concepts. It automatically annotates charts with crucial elements like internal and swing Break of Structure (BOS), Change of Character (CHoCH), order blocks, premium and discount zones, and equal highs and lows. This automation helps traders quickly identify trends, breakouts, and significant levels for potential trade setups, reducing the time needed for manual analysis.

Smart Money Concepts (SMC) Indicator Lux Algo TradingView, MT5, MT4

The SMC indicator was developed following the success of a Fair Value Gap script, responding to community requests for more advanced features. The indicator caters to traders who focus on understanding liquidity and optimizing entry and exit points by identifying where institutional orders might be placed, such as buy or sell-side liquidity zones.

Key features include:

Real-Time Market Structure Analysis: Automatically labels market structures to help identify trends and breakout points.
Order Blocks: Highlights areas of significant institutional buying or selling activity, which can serve as future points of interest.
Equal Highs & Lows (EQH/EQL): Marks these levels, signaling potential market reversals due to liquidity accumulation.
Fair Value Gap Detection: Identifies gaps that may be revisited by the market, offering retracement trade opportunities.
Premium & Discount Zones: Displays overvalued and undervalued zones, aiding in finding optimal entry and exit points.
Previous Highs & Lows: Marks historical levels that could serve as support or resistance.

The article also illustrates how the indicator can be used in practical scenarios, such as using swing market structure labels to identify significant breakouts and reversals. It shows how order blocks can be leveraged to determine confirmation entries or potential trade targets. The indicator's features, like marking the Previous Monthly High, Strong High, and Swing Order Block as stop loss levels, are demonstrated to help traders refine their strategies.

In conclusion, the SMC indicator encapsulates the core elements of Smart Money Concepts, providing traders with a robust interpretation of market structure, liquidity, and price action. While SMC concepts, popularized in the forex community by ICT, are widely used, the article cautions that these concepts do not guarantee access to institutional or "bank-level" liquidity, and there is no empirical evidence validating these teachings.