Smart Money Concepts Explained: BOS, CHoCH, Order Blocks, and FVGs

Smart Money Concepts (SMC) has become one of the most popular trading methodologies. Here's a clear breakdown: **Market Structure (the foundation)** Bull structure = Higher Highs + Higher Lows. Bear structure = Lower Highs + Lower Lows. **Break of Structure (BOS)** Price breaks beyond the previous swing high (in uptrend) or swing low (in downtrend). Confirms the current trend is continuing. **Change of Character (CHoCH)** The FIRST break in the opposite direction. Signals a potential reversal. Your highest-value reversal signal. **Order Block (OB)** The last opposing candle before a strong impulse. Bullish OB = last red candle before a rally. When price returns to OBs, it often respects them as support/resistance. **Fair Value Gap (FVG)** When price moves so aggressively that a three-candle imbalance forms. Price often retraces into FVGs to "fill the gap" before resuming. **Inducement** A fake level set to trap traders before the real move. Equal highs and equal lows are inducement targets. Start with BOS/CHoCH to understand direction, then add OBs for entries. That combination alone creates a complete trading system. What SMC concept are you currently working on mastering?