SMC Strategies (BOS, CHOCH, FVG)

Smart Money Concepts (SMC) strategies are based on institutional trading patterns and market structure. They focus on identifying where large players (banks, funds) are likely entering and exiting the market.

Key SMC Concepts

• Break of Structure (BOS) — When price breaks a previous swing high (bullish) or swing low (bearish), confirming trend continuation
• Change of Character (CHOCH) — When price breaks structure in the opposite direction, signaling a potential trend reversal
• Fair Value Gap (FVG) — A three-candle pattern where a gap exists between the first and third candle. Price tends to return to fill these gaps
• Order Blocks — Areas where institutional orders were likely placed, often acting as strong support/resistance

BOS Strategy Template

Enter in the direction of the break of structure. For example, after a bullish BOS (price breaks above the previous swing high), look for a pullback to a recent order block or FVG for entry. Set stop loss below the last swing low.

CHOCH Reversal Strategy

When a CHOCH occurs, it signals a potential trend reversal. Wait for confirmation (a secondary break of structure in the new direction), then enter on a pullback to a key level. This strategy aims to catch the beginning of new trends.