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  • Writer's pictureVasily Trader

Profitable Multiple Time Frames Smart Money Strategy For Trading Forex & Gold

Updated: May 27


profitable smart money trading strategy

In this post, I will share with you a very accurate and profitable SMC Smart Money trading strategy that combines top-down analysis, liquidity, imbalance, order block and inducement.



Step 1 - Identify liquidity zones on a daily


Liquidity zones are the areas on a price chart, where big players are placing their orders. From such areas, significant bullish and bearish movements initiate.


Liquidity zones that are above the current price will be the supply zones, while the liquidity zones that are below the current price will be the demand zones.


We will look for shorting opportunities from supply areas and for buying opportunities from demand zones.


smc trading liquidity zones

Here are the liquidity zones that I identified on EURJPY.


Step 2 - Wait for a test of one of the liquidity zones


Let the market test the liquidity zone.


For buying, the price should reach a lower boundary of a demand zone.


For shorting, the price should test an upper boundary of a supply zone.


simple smart money strategy

I underlined the exact levels that the price should test on EURJPY.


how to trade smart money concepts

Here is the test of the lower boundary of the demand zone.


Step 3 - Look for inducement on an hourly time frame


With the inducement, smart money make the market participants think that the liquidity zone that the price is testing doesn't hold anymore.


When the price tests a supply area, an hourly candle close above its upper boundary will be a bullish inducement.

With that, the smart money incentivize buying orders.


When the price tests a demand area, an hourly candle close below its lower boundary will be a bearish inducement.

With that, the smart money incentivize selling orders.


inducement in smart money trading

The price closed below a lower boundary of a demand zone on EURJPY on 1H time frame.


Step 4 - Look for imbalance on an hourly time frame


After a violation of a supply area on an hourly time frame, look for a bearish imbalance.


Bearish imbalance is a strong bearish candle with wide range and big body. With that candle, the market should return within a supply zone and closed within or below that.


After a violation of a demand area on an hourly time frame, look for a bullish imbalance.


Bullish imbalance is a strong bullish candle with wide range and big body. With that candle, the market should return within a demand zone and closed within or above that.


imbalance in smc trading

Here is the example of a bullish imbalance on EURJPY.


After a bearish inducement, the price formed a high momentum bullish candle and closed within the demand zone.


The imbalance signify that a liquidity zone violation was a trap.

With that, smart money simply was trying to grab the liquidity.


That will be a signal for you to open an order.


Step 5 - Look for an order block


After the formation of the imbalance, the market becomes locally week and quite often corrects to an order block.


Order block will be the closest hourly liquidity zone.


After a formation of a bearish imbalance, look for a supply zone on an hourly time frame. That will be your perfect zone to sell.


After a formation of a bullish imbalance, look for a demand zone on an hourly. That will be your area to buy from.


how to find order block smc

Here is the order block on EURJPY.


Step 6 - Set a limit order


Set a sell limit order within a supply area after a formation of bearish imbalance on an hourly time frame.

Set a buy limit order within a demand area after a formation of a bullish imbalance on an hourly.


smc trading with examples

Here is your buy entry level on EURJPY.


Step 7 - Select the target


If you sell, your target should be the closest daily structure support: horizontal or vertical one.


If you buy, your target should be the closest daily structure resistance: horizontal or vertical one.


best smc strategy

In our example, our closest structure resistance if a falling trend line.


Step 8 - Set stop loss


If you sell, stop loss will lie above a bullish inducement.


If you buy, stop loss will lie below a bearish inducement.


learn smc for free

Here is a perfect point for a stop loss for a long trade on EURJPY.


Step 9 - Trade


Let the price trigger your entry, and then be prepared to wait.


smart money trading examples

It took many days for EURJPY to reach the target.


Trading Tips:


1. Make sure that you have a positive reward/ratio. It should be at least 1.2

2. Risk no more that 1% of your trading account per trade


Being applied properly, that strategy shows 70%+ accuracy.

Try it by yourself and let me know your results.



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