Smart money concepts (order blocks, FVG)

SMC, popularised largely through online trading communities, assumes that big players leave footprints on the chart. An order block is the last opposing candle before a strong move, read as a zone where institutions placed orders. A fair value gap (FVG) is a three-candle imbalance where the middle candle moved so fast that the wicks of its neighbours do not overlap, leaving a gap price often revisits. Liquidity sweeps, breaks of structure and changes of character complete the vocabulary.

The approach is very popular among retail crypto traders on social media and in paid courses, partly because crypto charts show frequent wicks through obvious levels that fit the liquidity narrative. Many of its ideas repackage older concepts such as supply and demand zones, Wyckoff springs and market structure.

Its claims about what institutions are doing are rarely verifiable, and definitions vary between educators, so two SMC traders can mark different zones on the same chart. Like other discretionary methods, it needs testing and strict risk management, not faith in the label.