Smart Market Structure Trading System and Automatic Scanner – Trading Systems – 13 October 2023

This blog is used to explain the detailed steps to use the Smart Market Structure program and its scanner. 

I’ll use an example to illustrate the detailed steps to make it easy to understand: 

Step 1. Go to the scanner. and look at attached file named “smart-market-structure-opportunity-scanner-1.png”.

Step 1.a  Look for the row with the most “bright yellow” columns. Of course, you can change the color to your liking in options. For now, the last line has 7 columns with yellow highlights. It’s “USDJPY” pair. 

The texts on these columns show

“> 6MH( 8 )”,  “> 3MH( 8 )”,  “> 2MH( 8 )”,  “> MH( 8 )”,  “> WH( 8 )”,  “> YH( 28.7 )”,  “< DH( -1.1 )”.  

It means the current price of USDJPY at 149.78 is above 6 monthly High price for 8 pips. ( also above 3 month high, 2 month high, monthly high, and weekly high price for 8 pips. And above Yesterday’s High price for 28.7 pips, and below Today’s High price for -1.1 pip.  

This one row gives out a lot of accurate information on where price is relatively on bigger timeframes, which is what Institutions use based on Smart Money Concepts. 

Step 1.b  USDJPY is the pair to choose for watch/entry because it’s right at the highest price point of the last 6 months. 

              Now we look at the USDJPY chart in detail to verify. 

Step 2. Look at the 2nd attached chart file named “USDJPY1.png”. It’s the daily chart of USDJPY with “Smart Market Structure Lines” program applied on chart. The program has the capacity to show OrderBlocks, Fair Value Gaps, Break of Structure, and Market Structure Shift, and other features on chart as well as lots of other features and options. I only turned on OrderBlocks to show on chart for illustration purposes. 

Step 2.a  As the chart shows, the last time price hits 149.78 was Oct 21st, 2022, almost 12 months ago. And the Highest price on that day was 151.94, it opened at 150.12. It confirmed the point that indeed the current price of 149.78 was the highest price of last 6 months. And actually the last row, the 2 left columns did show it’s 215 pips below its 12 month high, and 24 month high. 

Step 2.b Looking at the daily chart in detail, we find that on Oct 21st, 2022, it actually was a 500 point day ( High 151.94 – 146.16 ).  578 pips in one day. And price reversed to the downside for 3 months afterwards ( from Oct 21st, 2022 to Jan 16th, 2023 ). It confirmed again it’s the great turning point, and a great pair to watch for entries. No need to wait for long for great opportunities anymore! 

Step 2.c I only put on OrderBlocks on chart, and it shows on Oct 20th, 2022, the day before the 500 point move day, it was the Bearish OrderBlock marked on the chart. On this day price opened at 149.84 and the High was 150.28. Based on Smart Money Concepts, it was the last bullish candle before price turned downwards afterwards for 3 months. And it showed on chart ever since, and the Scanner caught it on Oct 2nd, 2023, almost one year later. And we don’t have to wait a year, or any day at all to catch these great turning points! 

Step 2.d the day of Oct 2nd, 2023’s price action, reaching 149.78, confirmed the concept that prices would go back to fulfill the unfilled Bearish OrderBlock before heads down. It’s also the “Stop Hunt” which Smart money uses to sweep the stops at this level before turning.  The program has the option to turn filled OrderBlocks/FVGs off, or turn them into other colors ( I had grey color on chart when they get filled/touched with later price movements ). You can set it to any color you want on input options. 

Now we go to Step 3. How do we take advantage of this great entry opportunities? 

Step 3. Following Smart Money Concepts of Top Down analysis, we go from higher timeframe charts ( Weekly, Daily ), to lower timeframe charts ( 4 hour, 1 hour, etc ). Now look at attached 3rd file named USDJPY-4Hr-chart.png. It’s the 4 hour chart of USDJPY of recent price movements. I put a blue crossline on price level of 149.78, on the day of Oct 2nd, 2023 when the Scanner caught it. Apparently, there were 5 more 4-hour bar passed to give user plenty of time to take this opportunity, ( 20 hours or a day of trading time ). So you only need to wait 5 bars before trades goes to your direction! 

Step 3.a  On Oct 3rd, 2023, USDJPY indeed turned downwards, with High of 150.16 to the Low of 147.27 ( about 297 points move, almost 300 pips in one day! ). This is the amazing power of the scanner, which can find great trading opportunities utilizing the computer’s super calculating power we have today. Of course, we all have different personalities and trades different timeframes on different time zones, that’s why the scanner shows the pip difference when it gets close to all these longer-term important price levels, the highest and lowest price of 24 months, 12 month, etc, to the last week, and last day. To accommodate these different trading styles. 

Step 4. To confirm the validity of the Smart Mondy Concepts, on the 4 Hour chart, because of the sudden movements of 300 pip drop on Oct 3rd, 2023, it created another “Bearish OrderBlock” again on the 4-hour chart, as marked with purple color on chart. and on Oct 12th, 2023, 9 days later, it was filled again. So people who trades lower timeframes ( swing trader or day trader ), can use these unfilled bullish or bearish OrderBlocks, Fair Value Gaps, in the timeframe they prefer, and trade accordingly. 

Step 5. The marks of MSS ( Market Structure Shift ) on the chart, shows that the direction of the price movements have turned on the 4-hour chart. To confirm trading direction change on this specific timeframe. One of the hardest things with trading is to deal with multiple timeframes, and with the help of BOS and MSS marks on the chart, it greatly simplifies the process of confirming market direction on specific timeframes. 

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