What it means
It is widely taught to retail traders today. Treat it as a framework to test, not proven truth: there is little formal research on it.
In practice
SMC replaces indicator signals with a story about orders: where stops are resting, where price moved too fast, and where large traders appear to have acted. A typical plan names a liquidity target, waits for a sweep and a shift in structure, and enters from an imbalance.
Its strengths are precise entries, small stops and a clear reason for each trade.
What to watch for
The vocabulary is large and much of it relabels older ideas such as support, resistance and failed breakouts. Nobody can see what institutions are doing, so test the methods on your own data before trusting them.
Related terms
4 terms- ICTThe trader whose teachings popularised fair value gaps, killzones, Power of 3, OTE and many other SMC terms.
- LiquidityIn SMC, the pools of resting orders, especially stop-losses, that sit beyond obvious highs and lows.
- Order blockOBThe last opposite-coloured candle before a displacement that breaks structure; price often reacts when it returns.
- Fair value gapFVGA three-candle gap where candle 1's wick and candle 3's wick don't overlap, left by a fast move.