Smart Money Concepts (SMC) [LuxAlgo]

11. Okt. 2022

This all-in-one indicator displays real-time market structure (internal & swing BOS / CHoCH), order blocks, premium & discount zones, equal highs & lows, and much more...allowing traders to automatically mark up their charts with widely used price action methodologies. Following the release of our Fair Value Gap script, we received numerous requests from our community to release more features in the same category.

"Smart Money Concepts" (SMC) is a fairly new yet widely used term amongst price action traders looking to more accurately navigate liquidity & find more optimal points of interest in the market. Trying to determine where institutional market participants have orders placed (buy or sell side liquidity) can be a very reasonable approach to finding more practical entries & exits based on price action.

The indicator includes alerts for the presence of swing structures and many other relevant conditions.

Features

This indicator includes many features relevant to SMC, these are highlighted below:

• Full internal & swing market structure labeling in real-time
  
• Break of Structure (BOS)
  
• Change of Character (CHoCH)
  
• Order Blocks (bullish & bearish)
  
• Equal Highs & Lows
  
• Fair Value Gap Detection
  
• Previous Highs & Lows
  
• Premium & Discount Zones as a range
  
• Options to style the indicator to more easily display these concepts
  

Settings

• Mode: Allows the user to select Historical (default) or Present, which displays only recent data on the chart.
  
• Style: Allows the user to select different styling for the entire indicator between Colored (default) and Monochrome.
  
• Color Candles: Plots candles based on the internal & swing structures from within the indicator on the chart.
  
• Internal Structure: Displays the internal structure labels & dashed lines to represent them. (BOS & CHoCH).
  
• Confluence Filter: Filter non-significant internal structure breakouts.
  
• Swing Structure: Displays the swing structure labels & solid lines on the chart (larger BOS & CHoCH labels).
  
• Swing Points: Displays swing points labels on chart such as HH, HL, LH, LL.
  
• Internal Order Blocks: Enables Internal Order Blocks & allows the user to select how many most recent Internal Order Blocks appear on the chart.
  
• Swing Order Blocks: Enables Swing Order Blocks & allows the user to select how many most recent Swing Order Blocks appear on the chart.
  
• Equal Highs & Lows: Displays EQH/EQL labels on chart for detecting equal highs & lows.
  
• Bars Confirmation: Allows the user to select how many bars are needed to confirm an EQH/EQL symbol on chart.
  
• Fair Value Gaps: Displays boxes to highlight imbalance areas on the chart.
  
• Auto Threshold: Filter out non-significant fair value gaps.
  
• Timeframe: Allows the user to select the timeframe for the Fair Value Gap detection.
  
• Extend FVG: Allows the user to choose how many bars to extend the Fair Value Gap boxes on the chart.
  
• Highs & Lows MTF: Allows the user to display previous highs & lows from daily, weekly, & monthly timeframes as significant levels.
  
• Premium/Discount Zones: Allows the user to display Premium, Discount, and Equilibrium zones on the chart
  
  Usage
  
  Users can see automatic CHoCH and BOS labels to highlight breakouts of market structure, which allows to determine the market trend. In the chart below we can see the internal structure which displays more frequent labels within larger structures. We can also see equal highs & lows (EQH/EQL) labels plotted alongside the internal structure to frequently give indications of potential reversals.
  
  
  
  In the chart below we can see the swing market structure labels. These are also labeled as BOS and CHoCH but with a solid line & larger text to show larger market structure breakouts & trend reversals. Users can be mindful of these larger structure labels while trading internal structures as displayed in the previous chart.
  
  
  
  Order blocks highlight areas where institutional market participants open positions, one can use order blocks to determine confirmation entries or potential targets as we can expect there is a large amount of liquidity at these order blocks. In the chart below we can see 2 potential trade setups with confirmation entries. The path outlined in red would be a potential short entry targeting the blue order block below, and the path outlined in green would be a potential long entry, targeting the red order blocks above.
  
  
  
  As we can see in the chart below, the bullish confirmation entry played out in this scenario with the green path outlined in hindsight. As price breaks though the order blocks above, the indicator will consider them mitigated causing them to disappear, and as per the logic of these order blocks they will always display 5 (by default) on the chart so we can now see more actionable levels.
  
  
  
  The Smart Money Concepts indicator has many other features and here we can see how they can also help a user find potential levels for price action trading. In the screenshot below we can see a trade setup using the Previous Monthly High, Strong High, and a Swing Order Block as a stop loss. Accompanied by the Premium from the Discount/Premium zones feature being used as a potential entry. A potential take profit level for this trade setup that a user could easily identify would be the 50% mark labeled with the Fair Value Gap & the Equilibrium all displayed automatically by the indicator.
  
  Conclusion
  
  This indicator highlights all relevant components of Smart Money Concepts which can be a very useful interpretation of market structure, liquidity, & more simply put, price action. The term was coined & popularized primarily within the forex community & by ICT while making its way to become a part of many traders' analysis. These concepts, with or without this indicator do not guarantee a trader to be trading within the presence of institutional or "bank-level" liquidity, there is no supporting data regarding the validity of these teachings.

11. Okt. 2022

Versionshinweise

- Fixed array.get errors when enabling Order Blocks
- Fixed max_bars_back error when enabling Previous Highs/Lows
- Added Order Block Filter setting with 2 methods allowing users to filter out volatile Order Blocks.
- Added borders to Internal Order Blocks
- Minor changes

24. Okt. 2022

Versionshinweise

- Fixed order block alert not alerting on break
- Fixed order block not being deleted when broken
- Minor changes

9. Feb. 2023

Versionshinweise

- Added "Label Size" setting to increase size on internal market structure, swing market structure, and EQH/EQL labels.
- Minor changes

5. Sept.

Versionshinweise

- Improved script performance
- Enhanced detection capabilities for structures, order blocks, fair value gaps, and equal highs and lows
- Monochrome style can be applied to fair value gaps and premium/discount zones.
- The correct style has now been applied to the MTF highs and lows levels
- Minor changes

10. Sept.

Versionshinweise

- Fixed previous high/low causing errors on low timeframes
- Minor changes