Smart Money Concepts (SMC) Indicator Explained

The Smart Money Concepts (SMC) indicator automates the vocabulary of the ICT/smart-money school: swing mapping, Break of Structure (BOS) when price takes out the trend's last swing, Change of Character (CHoCH) when it breaks the counter-trend swing, plus derived order blocks and liquidity levels. Opinions become states.

How It Works

• A swing map tracks confirmed structural highs and lows.
• BOS: continuation — the with-trend swing broken. CHoCH: the earliest structural reversal warning.
• Order blocks (origin candles of impulsive moves) mark institutional footprints.

How to Trade It

The disciplined SMC loop: trade with the structure state (longs while bullish BOS chain holds), treat CHoCH as the tighten-or-exit bell, and stalk entries at order blocks in the structure's direction. As a filter, 'structure agrees' upgrades almost any entry system.

Building It in Setup.Cash

Add Smart Money Concepts (SMC) in the strategy builder — the length input controls its sensitivity — and use its value in any entry, exit, or filter condition. You can also combine it with other tools in the Indicators Lab or via the AI indicator generator. See the Swing High/Low Detector for the raw swing engine underneath. For the full category overview, see the market structure tools guide.

Structure tools define context; your entry logic supplies timing. Backtest both halves together before going live.