Smart Money Concepts | Supply & Demand

[skrimon]

What is Smart Money?
Smart money refers to the capital that institutional investors, central banks, and other professionals or financial institutions control. It is run by professional investors who know how to predict market trends and make the most of the money they make. The term "smart money" came from the world of gambling, where it was used to describe gamblers who knew a lot about the game they were betting on or who had access to information that the general public didn't. The idea behind "smart money" is that these investors can spot trends and opportunities before the rest of the market and position themselves in a way that takes advantage of them. They might also be able to influence the market in their favor by making people want to buy or sell certain securities. Some traders try to follow the smart money by looking at public filings, news reports, and other sources of information. However, it's important to remember that not all trades made by institutional investors or large financial institutions are necessarily "smart," and it can be risky to just copy what they do.

Supply Zone
In trading, a "supply zone" is a range of prices where there are a lot of orders to sell. This means that there is a lot of selling pressure and that the price may temporarily hit a "resistance level." On a price chart, a supply zone is an area where the price has turned around or stopped moving and where there are a lot of sell orders that haven't been filled yet or are pending. When making trading decisions, traders can use supply zones as a point of reference. For example, if the price gets close to a supply zone, traders might think about selling or taking profits on positions they already have. On the other hand, if the price breaks through a supply zone, traders may take that as a sign that the price is going up and buy or add to long positions.

Demand Zone

In trading, a "demand zone" is a price range where there are a lot of buy orders. This means that there is a lot of buying pressure and the price may be temporarily supported. On a price chart, a demand zone is an area where the price has turned around or found support in the past and where there are a lot of buy orders that haven't been filled yet or are still being processed. For instance, if the price gets close to a demand zone, traders might think about buying or adding to their long positions. If, on the other hand, the price breaks through a demand zone, traders may see this as a bearish sign and decide to sell or take profits on positions they already have.

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[mamadali]

It was very perfect to come with a picture of the perfect concept

 

[Juniobttbh]

this operating style is very cool, I'm currently using it, it gains a lot and loses little, too bad we don't have it

 

[Daantje Pieters]

It’s unguessable when the market will collapse so we should use stop loss as a safeguard against sudden market collapses. Forex is an uncertain and volatile market where nothing can be accurately predicted. So, using stop loss can shield traders from sudden losses.

 

[Goldsniper]

What is Smart Money?
Smart money refers to the capital that institutional investors, central banks, and other professionals or financial institutions control. It is run by professional investors who know how to predict market trends and make the most of the money they make. The term "smart money" came from the world of gambling, where it was used to describe gamblers who knew a lot about the game they were betting on or who had access to information that the general public didn't. The idea behind "smart money" is that these investors can spot trends and opportunities before the rest of the market and position themselves in a way that takes advantage of them. They might also be able to influence the market in their favor by making people want to buy or sell certain securities. Some traders try to follow the smart money by looking at public filings, news reports, and other sources of information. However, it's important to remember that not all trades made by institutional investors or large financial institutions are necessarily "smart," and it can be risky to just copy what they do.

Supply Zone
In trading, a "supply zone" is a range of prices where there are a lot of orders to sell. This means that there is a lot of selling pressure and that the price may temporarily hit a "resistance level." On a price chart, a supply zone is an area where the price has turned around or stopped moving and where there are a lot of sell orders that haven't been filled yet or are pending. When making trading decisions, traders can use supply zones as a point of reference. For example, if the price gets close to a supply zone, traders might think about selling or taking profits on positions they already have. On the other hand, if the price breaks through a supply zone, traders may take that as a sign that the price is going up and buy or add to long positions.

Demand Zone

In trading, a "demand zone" is a price range where there are a lot of buy orders. This means that there is a lot of buying pressure and the price may be temporarily supported. On a price chart, a demand zone is an area where the price has turned around or found support in the past and where there are a lot of buy orders that haven't been filled yet or are still being processed. For instance, if the price gets close to a demand zone, traders might think about buying or adding to their long positions. If, on the other hand, the price breaks through a demand zone, traders may see this as a bearish sign and decide to sell or take profits on positions they already have.

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This is great concept! Thanks for sharing.

 

[mohdfx]

Thanks for sharing! Amazing information, but as others said, Forex is unpredictable sometimes and you can overcome this with proper risk management and stop losses.

 

[forexxx]

It was very perfect to come with a picture of the perfect concept

I preffer ICT Concept... this is more logical...

 

[drewski1980]

I preffer ICT Concept... this is more logical...

Yes but ICT should be taken with a grain of salt, as there are many losing traders using it

 

[Fin_Trader]

I would add that these combinations work well on higher timeframes. On lower timeframes there may be many stop losses.

 

[skrimon]

I would add that these combinations work well on higher timeframes. On lower timeframes there may be many stop losses.

Absolutely! You're right about higher timeframes being better suited for these combinations. The increased volatility on lower timeframes can trigger more frequent stop-loss activations, potentially leading to "choppy" trading and frustration. Those indicators might be more effective on higher timeframes where price movements are smoother.

 

[Fin_Trader]

I have noticed more than once that the price can reverse sharply, but only after a false breakout of such even support or resistance levels, because often there are many stop losses behind these levels. This also needs to be taken into account in such trading.

 

[addy1]

nice its really helpful for beginner smart money concepts

 

[Kinhnano]

this operating style is very cool, I'm currently using it, it gains a lot and loses little, too bad we don't have it