In the market, people often take trades in a hurry. As a result, more than half of the people lose their money in trading. If you want to make money in trading, then you will have to learn the smart money concept. Today, I will tell you about the smart money concept by covering many such topics like what is smart money concept in trading, how smart money works, why is smart money used in trading, how to identify smart money, etc. So let’s start.
What is Retailer and Institution?
Before understanding the smart money concept, you should understand what a retailer and an institution are. Retailer means people like you and me who do trading. Those who are not able to maintain their profit and loss, and we incur loss. And institutions are those who have the ability to move the market. Institutions always profit from our loss. Whenever we incur loss, the institution will make profit.
what is smart money concept in trading
What is a smart money concept? The money that institutions invest in the market is called smart money in common language. And the money that institutions use to make moves in the market, which you must be seeing in your trading charts, that move is called a smart money concept.
Why is smart money used in trading
Now this question must be arising in your mind that why should we use the smart money concept (Why is smart money used in trading), we should use the smart money concept because this concept is being used by the market and institutions, you people simply do not know about the smart money concept, that is why I will give you complete information about the smart money concept.
To recognize the smart money concept, first of all you should know how to recognize the trend. Without recognizing the trend, you cannot trade in the market. If you trade in the market without knowing the trade, then 9 times out of 10, only your stop loss will be hit. So let’s accept it.
You have learnt to identify the trend in the market, now you have to decide whether you will trade in up trend or down trend, if you are trading in down trend then you have to see in the chart from where the market has started falling and from there you have to start mapping.
How to benefit from smart money
You can reduce your loss with smart money. And can expect more profit because in smart money concept you can trade along with institutions. Due to which the possibility of loss reduces to a great extent and the profit ratio increases. You can easily take 1/2 in smart money concept. And your risk to reward ratio will increase. You may be able to take only 2 trades in a week but you will always be in profit by using smart money concept.
How to create a smart money strategy
Before using smart money strategy, it is very important for you to know its basics. Without knowing its basics, you will not be able to trade in smart money strategy, for which you should know what is BOS and what is choch, what is liquidity hunting, for which
I will tell in detail about BOS, CHOCH, FVG (Fair Value gap), Order Block etc. in the next part.
