Smart Money Concepts

The Smart Money Concepts indicator detects market structure shifts, volumetric order blocks, fair value gaps, liquidity sweeps, and premium/discount zones using Smart Money methodology. It provides a comprehensive suite of tools to identify institutional buy/sell activity and grade structural levels based on displacement quality and volume.

Usage

The Usage section describes how the script can be used to navigate complex market structures. Users can monitor real-time trend shifts and institutional zones to identify high-confluence entry and exit points.

Market Structure and Pivots

The tool identifies swing highs and lows based on a configurable lookback period (default 50 bars). It automatically labels structure as BOS (Break of Structure) for trend continuation or CHoCH (Change of Character) for trend reversals. Users can toggle a "liquidity sweep" requirement to ensure structural breaks are preceded by a stop-hunt before validation.

Volumetric Order Blocks (OB)

When a structural break occurs, the indicator identifies the responsible order block and assigns it a grade (A, B, or C).

• Grade A: High displacement, strong body-to-range ratio, and significant relative volume.
• Grade B/C: Moderate to lower institutional signatures. Users can filter the chart to display only high-quality (Grade A or B) blocks to reduce noise.

Confluence Dashboard

The composite confluence score (0–100) provides a real-time assessment of market conditions by weighting five factors: chart bias, multi-timeframe agreement, proximity to order blocks, price position (Premium/Discount), and recent sweep activity. A score above 70 indicates high bullish/bearish alignment.

Details

The script executes logic across several core concepts:

• Displacement Analysis: Order blocks are scored using ATR-normalized displacement of the breakout leg and volume relative to a 20-bar average.
• Activity Splitting: Unmitigated order blocks feature internal buy and sell activity bands, visualizing directional pressure since the zone's inception.
• Mitigation Logic: Zones are removed or converted when price closes through them (or via wick mitigation, based on settings), ensuring the chart remains relevant.
• Liquidity Sweeps: Marked with an (×) when a candle wicks beyond a swing extreme but closes back within the range, identifying potential false breakouts.

Settings

Market Structure

• Display Mode: Choose between "Historical" to see all past structures or "Present" for active levels only.
• Swing Pivot Length: Adjusts sensitivity for HH/HL/LH/LL detection (10–200 range).
• Mark Liquidity Sweeps: Toggles the visual marker for stop-hunts.
• Color Candles by Trend: Changes candle colors based on current market bias.

Order Blocks & FVGs

• Minimum OB Grade: Filters displayed order blocks by quality (A, B, or C).
• Show Activity Split: Toggles the internal buy/sell pressure visualization within OBs.
• FVG Size Threshold: Sets the minimum size for a Fair Value Gap to be rendered, scaled by ATR.
• Mitigation Source: Determines if a zone is cleared by a "Close" or a "Wick."

Dashboard & Zones

• Show Premium/Discount/Equilibrium: Renders shaded zones between the most recent swing extremes.
• Higher Timeframes (1-3): Configures the three timeframes used for the multi-timeframe agreement component of the confluence score.
• Threshold (Equal Highs/Lows): Sets the ATR-scaled sensitivity for detecting liquidity at equal price levels.

FAQ

How do I interpret the Order Block grades? Grades represent institutional quality. An "A" grade signifies a move with high volume and strong displacement, "B" is standard, and "C" represents marginal institutional signature.

What does the Confluence Score measure? It is a weighted average of trend bias, HTF alignment, zone proximity, and liquidity sweeps, providing a single metric for trade conviction.

How can I access this tool? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.