Intraday Trading: A Guide to Smart Money Concepts

Why Traders Lose and Why a Plan Helps

Most traders lose money because they jump into the market without a plan. It’s like cooking without a recipe—you might get something edible, but it’s a gamble. I’ve used this structured plan for analyzing and trading, and it’s simple and effective. I’ve had good trades with it, and I think it can help you too.

Why Pick Day Trading?

Here’s what makes day trading stand out:

• No Overnight Risk: You’re done by the end of the day, unlike swing trading where you hold positions longer.
• Less Crazy Than Scalping: It’s more stable than super-fast scalping trades.
• Fits Smart Money Concepts (SMC): Works well with ideas like liquidity, order blocks, fair value gaps, and market structure.

Key Ideas in Smart Money Trading

Smart money trading is about spotting where big market moves start. Here’s what you need to know:

1. Supply & Demand Zones

These are spots where the price jumps fast because of strong buying or selling.

• What They Are: Areas where price shoots up (demand) or down (supply).
• How to Spot Them: Look for a quick move that starts it. When the price comes back, it often bounces off.
• Things to Check:
  • Inefficiency: when the price moves so fast, you can see a big gap between the closing of the previous candle and the next candle closing. Gaps on the chart (Fair Value Gaps or FVGs) show uneven buying or selling.
  • Break of Structure (BOS): Price breaks a key level, hinting at a shift
  • Push Distance: The farther the price goes from the zone, the stronger it might react later.

Example: On a 1-hour EUR/USD chart, a demand zone formed after a fast upward move. It made an FVG, broke the old structure, and pushed price way up. When it returned, it bounced.

But if it broke below, that’d be a Change of Character (ChoCH)—a sign the market turned bearish.

2. Change of Character (ChoCH) & Liquidity Tricks

A ChoCH happens when the market switches direction—like from up to down. But it’s not always real.

• Two Traps:
  1. Liquidity Grab: Price dips below a low point where stop-losses sit, grabs them, and then goes back up. If it returns to range, it’s a buy chance—wait for a clear sign like a pin bar. If it keeps dropping, it’s a real ChoCH.
  2. Fair Value Gap (FVG) Fix: Price might hit an unfilled FVG to balance out before continuing. Check the chart’s left side for gaps to avoid mistakes.

3. Supply vs. Demand: Who’s Winning?

You need to know if buyers or sellers are in charge.

• How It Works:
  • Does the price hit a demand zone? Buyers are on top.
  • Hits a supply zone? Sellers take over.
  • Does it break a demand zone? That’s a ChoCH—look for a new supply zone.
  • Does it break a supply zone? Same thing—expect a new demand zone.
• Market Trends:
  • Uptrend: Higher highs and lows—focus on demand zones.
  • Downtrend: Lower highs and lows—target supply zones.
  • Sideways: Supply and demand fight—wait for a breakout.

4. Order Blocks (OBs): Big Player Zones

Order blocks are special supply or demand areas where big traders step in.

• How to Find Them: The first candle that makes an FVG is the order block. If orders are left, price reacts when it comes back.
• Watch Out: Not all work. Look for a fresh one with a BOS or ChoCH, and add extra checks. It’s based on big traders splitting orders, but sometimes they’re already gone.

Top-Down Analysis: Using Multiple Timeframes

This approach combines big and small timeframes to find good trades.

Steps:

1. Higher Timeframes (Daily/Weekly): Check the main trend and mark key zones—supply, demand, OBs.
2. Mid Timeframes (H4, H1): Find active zones to trade.
3. Lower Timeframes (M15, M5): Pick your exact entry with clear signals.

Risk Management & Trading Tips

• Wait for Good Setups: Don’t trade everything—stick to strong ones.
• Avoid Fakes: Check FVGs and liquidity zones to skip bad signals.
• Watch News & Volume: Big events can mess things up—stay aware.
• Limit Losses: Use a good risk-to-reward ratio to keep safe.

Final Notes

Smart money concepts give you a clear system. Use order blocks, liquidity grabs, BOS, and FVGs together, and stick to the trend with top-down analysis. Patience and discipline are what make it work.

If this helps, try it on your charts. It’s been solid for me, and it might be for you too. Good luck trading!