Jerry’s SMT Model

Swing Points, Market Maker Models, and Time

Price Can’t Reverse Without a Swing Point

Introduction:

Hi, I’m Jerry or known as Jerry_Trades on Youtube. I am a 16 year old ICT trader who
started back in 2022. Now I know what a lot of y'all are thinking, “How can we trust a 16
year old”? Well I made all the mistakes that could be made. When I first started trading,
I was a stupid 14 year old who spent all day just scrolling on Tiktok and stumbled upon
people flexing their cars and taking in helicopters to their private office to trade. Being
the dumb teen I was at the time, I bought into the lifestyle before I knew the skills.
Basically I asked my parents for a stock account and in stock trading there is a 25,000
dollar day trading rule which I didn’t know. What ended up happening was my account
getting frozen, but that wasn’t even the worst part. I took 86 trades that day, and I came
out with a P&L of -86 cents along with being an emotional wreck. After the day I knew I
needed a model. I went from Algo bots to support and resistance to indicators. However
the main problem is that I was strategy hopping daily. One day I would be trading RSI +
Bollinger Bands and the other I would be trading candlestick patterns with Support and
Resistance. Now after 2022 was over, I was seriously thinking about quitting trading. I
was in high school and I thought it was useless. Basically every retail trading method
and every book I read I had tried and everything couldn’t seem to click. Then I found
ICT who had a completely different view on the markets. It breathes new life into me.
However it was not all sunshines and rainbows. I loved learning ICT, in fact I finished
both the 2022 mentorship and all of the 2016 Core content in about a year and a half.
However, I never seem to understand how ICT traders put it on the charts. Sure I
understood what they were saying, but when it was time to actually trade, nothing. That
when I found GatieTrades on YT. Though his discord, mentorship, and other great
Youtubers like TTrades and Garrett, I found how to build my own model which is what
I’m going to share.

Table of Content:

Chapter 1 - What makes a Good Trader?

Chapter 2 - Candle Profiles and How to Trade
Chapter 3 - Daily Bias: ERL to IRL and Daily Closures
Chapter 4 - Four Hour Candle Profiles and Understanding MMXM
Chapter 5 - How to trade redistribution of MMXM with LTF Swing Points
Chapter 6 - Entries on Lower Timeframes
Chapter 7 - How to Use News as Drivers for Price
Chapter 8 - Double Stage SMT + Targets
Chapter 1: What Makes A Good Trader?

1. Mental Discipline & Patience

“Day trading is not an everyday trading... I don’t want to create traderholics. That’s
not a healthy lifestyle.” — ICT, Month 9: Sentiment Effect

Key Habits:

●​ Waits for high-probability setups only. Doesn’t force trades.​

●​ Knowing that missing a move is better than taking a bad one.​

●​ Avoids becoming "pip drunk" — obsessed with catching every move.​

●​ Understand that less is more: One good trade a week can be enough.​

Common Pitfalls Avoided:

●​ Overtrading​

●​ Revenge trading​

●​ Chasing price outside of PD arrays or optimal time windows

2. Depth of Understanding in ICT Concepts

“Focus on what the smart money is doing with their money… mimic their
characteristics in your own trading.” — ICT, Month 5: Quarterly Shifts

Core Skills:

●​ Mastery of:
○​ Market Structure
○​ Liquidity Pools (buy stops, sell stops)
○​ PD Arrays Matrix
○​ Daily Bias
 ●​ Being able to take ICT concepts and actually be able to execute them in a way that you
can understand

3. Time-Sensitive Execution
“Kill zones, session timing, and time-of-day logic is everything. The market
doesn’t respect your feelings, it respects time.” — ICT

Practices:

●​ Knows Kill Zones:

○​ London Open (2AM–5AM EST)
○​ NY Open (7AM–10AM EST)
○​ Reversal time (10AM–11AM EST)
○​ PM Session Liquidity (1PM–3PM EST)​

●​ Trades only when liquidity is expected to be engineered or purged.

●​ The when to trade is often as or more important as the how to trade.

4. Strict Risk and Trade Management

“The more you trade, the closer you are to the next loss.” — ICT

Rules:

●​ Risk per trade: typically 0.25% – 1%, never overleveraged.

●​ Stop Loss is planned before entry, usually based on structure (e.g. below OB or
FVG).
●​ Partial take profits taken:
○​ At liquidity targets
○​ Standard Deviation Projection Levels: -4 and -5 where market is overextended
●​ Final portion held for large-range expansions.

Execution Discipline:

●​ No add-ons unless price trades into another PD array

●​ No moving stops in hope​
Doesn’t “scale in” without reason
5. Emotional Maturity & Realistic Expectations
“Success comes from patience, discipline, and losing without losing your mind.” —
ICT

Traits:

●​ Accepts losing trades as part of the model.

●​ Avoids emotional attachment to analysis
●​ Detached from outcomes, focused on process and repetition.​
Does not celebrate wins or cry over losses — professional neutrality.

Psychological Anchors:

●​ Journals trades, including why a trade was taken or skipped.

●​ Understands psychological traps like FOMO, revenge trading, and overconfidence
after winning streaks.

“The worst thing that can happen is you win a few trades and think you're better than you
are. Then the market reminds you you’re not.” — ICT

6. Rule-Based Model Execution

“Having rules removes 90% of your emotional burden. You don’t think. You
execute.” — ICT

Common Setup Structure:

1.​ Daily/4H Bias: Institutional Order Flow bullish or bearish?

2.​ Liquidity Pool: Where’s the draw on liquidity (e.g., buy stops above swing high)?
3.​ Time of Day: Are we in the Kill Zone?
4.​ PD Array Entry: Is price at or near a FVG/OB/Breaker at a discount/premium?
5.​ SMT Divergence: Is there intermarket confirmation?
6.​ Risk/Reward: Is the opposing PD array far enough to justify trade?

7. Continuous Refinement and Backtesting

Habits:

●​ Screenshots and journals before and after each trade + Reviews trades every week.

“Watch the same thing over and over again until you can teach it to a 10-year-old.”
— ICT
Chapter 2: Candle Profiles:

The foundation of what I have used in this model was learned by TTrades. Candle Profiles are
basically just swing points characterized by how they formed. The idea is that the market can’t
reverse without a swing point. So what we are trying to do is to find candles in areas where we
expect a swing point to be formed. With that we are looking to catch the move that creates the
swing point or the expansion that should follow a swing point.

1. Understanding Candle Notation:

To move on, we first have to understand how I reference each candle in a swing formation. The
candles are named: C1 (Candle 1), C2 (Candle 2), C3 (Candle 3), and C4 (Candle 4).

Each candle has their own place in a swing point:

●​ Candle 1 will always be the candle before the high or low
●​ Candle 2 will always be the candle that forms the high or low
●​ Candle 3 will always be the candle following the high or low
●​ Candle 4 will always be the candle following candle 3
2. Understanding C2 Closures:

Credit to TTrades for the Photo

C2 Closures are where candle 2 sweeps out candle 1 low and closes back into the range.
Afterwards we expect expansion in candle 3 and candle 4. Ideally we would want to use a fib
tool to mark out 50% of the wick range and want to see price respect a PD array near or at the
50% mark. If we disrespect a PD array at the 50% mark, we would invalidate the trade.
In this example we have a C2 Closure shown though a long wick. Taking a Fib tool and marking
50% of the range we see how price respected the upper half.

See how we didn’t respect the 50% of the wick this time, leading to heavy bearish expansion.
3. Understanding C3 Closures:
With a C2 Closure we could anticipate a swing point due to the sweep of a previous candle low.
However in a C3 Closure, C2 closes below the C1 low. Due to this, it is likely for price to move
lower as shown in my picture. It’s still possible for this to form a swing point but due to how
unlikely it is we wait for C3 to close, forming the swing point. IT is better for us to trade C4 as we
still have that candle to trade. One requirement I do have is that c3 must have a strong close
over c2, seen though a close over c2’s open and if we can close above the range even better
but the open is just what we need.

This would be invalid as we don’t see price expand out of the c2 range even though we have a
swing point.
This would be valid as we had a strong close over c2 open, creating a CISD confirming a
reversal

3. Understanding C2 Reversal Into Expansion:

C2 Reversal into Expansion is a very interesting profile. It combines a Expansion candle with a
reversal candle. Basically the reversal happens so fast in a candle, that there actually is more
time for the candle to expand. If you can see that we finished a reversal in a short time, you can
trade the rest of the C2 candle.

In order to truly understand this topic you have to understand the relationship between time and
range of a candle. Every candle has a manipulation phase, which is the wick. Then we have
expansion, which is the majority of the body. How do you anticipate how long the wick is and
how much expansion you are going to get? Well, it all on time. A candle only has so much time
for it to manipulate and expand. So logically, if we spend a lot of time manipulating then we
shouldn’t have much time to expand. That equals less overall expansion.
So in this example we see how the c2 candle has a short wick and a long body. Lets take a look
on the LTF to see how this works.
On the 15 Min Timeframe we can see how the 2AM candle is the one that swept C1’s Low.
However, look how fast we created a CISD. The CISD confirms when the wick is done forming
and we can see expansion. As you can see, out of the 4 hours in the 2 AM candle, we only
needed 1 Hour and 45 Min to create the wick. So that means we have 2 hours and 15M to
expand, which we clearly see.
Chapter 3: Daily Bias

Daily Bias in ICT’s model is a foundational element for any day trader using Smart Money
Concepts. It defines the anticipated directional tendency for the trading day and helps guide
whether you should be looking for longs (buy setups) or shorts (sell setups). It's not a signal —
it's the contextual framework for what side of the market you should be on.

What Daily Bias Does

1.​ Establishes Directional Framework:

○​ Based on higher time frame institutional order flow (typically Daily and 4H).
○​ It tells you whether Smart Money is likely to accumulate or distribute on the
day.
2.​ Helps Avoid Trading Against Smart Money:
○​ If the Daily Bias is bullish, shorting may get you caught in a Judas swing or
short-term liquidity grab.
○​ If the Daily Bias is bearish, buying may result in fading the dominant sell-side
pressure.
3.​ Guides Entry Triggers & PD Array Selection:​

○​ A bullish bias will direct you to buy at discounts.​

○​ A bearish bias will lead you to sell at premiums.

Summary

Daily Bias = Your directional guide for the session

You trade with it, not against it.

It increases trade selection accuracy and keeps you from chasing traps engineered by Smart
Money.

“Focusing on strict conditions like Daily and/or 4H direction based on institutional order flow…
this will provide you the highest probability setups.” - ICT: Sentiment Effect – May 2017
How to Find ICT Daily Bias:
Everyone has their different ways on finding their daily bias but at the end of the we are all trying
to find where the daily candle is going to expand too. I’m just going to share how I do it.

1. Understanding Daily Closures:

Daily closures are very simple, basically it’s looking at how the previous day closed to anticipate
how the next day will form.

So in this example we see that on one day we sweep the previous day low. Because of this, we
can frame the next day to take out the previous day high. We continue doing this as long as we
don’t sweep the previous day high. When we do, then we just target the previous day low and
keep doing so as long as we close under it.
2. Understanding External Range Liquidity to Internal Range Liquidity:
Just to get some of the definitions out of the way: External Range Liquidity (ERL) = High and
Lows. Internal Range Liquidity = imbalances (Volume imbalances or FVG)

But why does price move from ERL to IRL?:

Step 1: Understand What Moves Price: price moves because the interbank algorithm is
1.​ Seeking liquidity to execute orders.
2.​ Delivering price efficiently toward a higher objective (a PD array or macro
target).
Step 2: Understanding ERL: That’s where liquidity is pooled
1.​ Retail traders have stop-losses clustered above highs or below lows.
2.​ Smart money wants to buy when others are forced to sell (e.g., stop-out longs).
3.​ The algorithm is designed to go to those stop zones to fill orders at optimal prices.
Step 3: Understanding IRL: The move to ERL creates imbalance
1.​ When price rushes to run stops, it often does so with an impulsive displacement.
2.​ That leaves behind Fair Value Gaps (inefficiencies in delivery).
3.​ The algorithm sees this as "unfinished business" — so it delivers price back into that
area to rebalance.
This sequence — ERL → IRL → Expansion — is how the algorithm maintains efficient delivery
while disguising intent to trap the uninformed.

As you can see, the price moves in the order I described. However price doesn’t move bullish all
the time, so how does a bearish example look like and how do we know when to switch from
bearish to bullish?
In this example we see bearish ERL to IRL. However, see how after we take another low, we
close back into the range and get an IFVG. We don’t want to see that happen as we should be
respecting bearish FVG’s. Also we got a CISD at the last bearish FVG. One by one we see how
each of the bearish FVG gets inverted. So an early indication of a weakening trend is seeing a
CISD or an IFVG.
Chapter 4: Four Hour Candle Profiles and Understanding MMXM

Now we are getting into the actual model. To understand my model, I’m looking to find where
the low or high of the day is and trade away from it. Basically a time based market maker model.
So let’s first find out how we find the high or low of the day. We determine if we find the high or
the low of the day with our daily bias. If we are bearish, we would want to find the high of day to
trade from. If we are bullish, we would want to find the low of day to trade form.

1. Understanding 4 Hour Candles:

Now each day has six 4 Hour candles. Now one of these candles has to make the day low or
high. The reason why I use the 4 Hour candles is due to how they are still an intraday chart with
clear alignment with session, such how 2AM is London session open and the majority of high or
lows of days is placed in London, but still filter out a lot of the noise.

Lower timeframes like the 1-minute or 5-minute are filled with constant noise — every small
swing looks important, every imbalance looks actionable, and the algorithm knows this. It uses
the LTF to deceive and trap retail traders by generating frequent false breakouts, fake SMT
divergences, and microstructure shifts that lure you into trading at the exact wrong moment.
What looks like a bullish move often turns out to be a liquidity raid.

What looks like a bearish breakdown is just a stop hunt. The result? You're reacting to moves
that have no real context, and more often than not, you end up buying the high or selling the
low.

This is where the 4-hour chart gives you the edge. The 4H timeframe smooths out all that
intraday chaos and clearly shows you where the real smart money business is happening. It
outlines the major PD arrays, shows true displacement and liquidity raids, and aligns directly
with session times — London, New York AM, and PM.

2. Understanding 4 Hour Candles Profiles:

Now most of these are from Garrett on YT. He is where I got these 4 hour profiles from so go
check him out. We focus on the 2AM and 6AM candles primarily as 2AM is the London session
which is usually where price manipulates thanks to the London session's tendency to use Asia
high or lows as liquidity. 6 AM often contains 8:30 Red Folder News and the 9:30 New York
Stock Exchange open, 2 events that heavily affect the market. Also all of these swing points
must come at a 1HR and 4 HR PD array.
3. London Reversal:

A London reversal is basically where the 2AM 4 Hour candle is a reversal into an expansion
candle. Remember this is the only c2 candle we can trade as we only want to trade heavy
expansion which is usually c3’s job. I personally don’t trade this as I don’t trade London
sessions. This is still a way to confirm low or high of day though, and that’s the only way I
personally use it.

3. New York Continuation:

New York is my personal session. I trade both AM and PM sessions. What I cover is primary for
AM session but can be applied to PM session very easily but just moving each candle up by 4
Hours.
So as you can see this 6AM continuation is very connected with the London reversal that we
just talked about. Basically we are waiting for London to reverse with a c2 or c3 closure and
then the 6 AM candle is our c3. This can also be used with London Reversal as we anticipate
heavier expansion. If 2AM is a c2 closure or reversal into expansion, we can trade 6AM as it
would be our C3 candle. However if 2AM is the C2 of a c3 closure we would need to wait for
6AM to finish and trade at 10 AM. The reason why I love this type of candle profile is because it
allows me to trade 8:30 and 9:30. More on that in the news chapter.
This is the other NY continuation. This is where we as NY traders trade the majority of our time,
the 10 AM 4 Hour Candle. Now this candle profile comes in a number of ways. If we have the
low or high of day established in either 2AM or 6 AM with a c2 closure or a c2 Reversal into
Expansion. However if the 10 AM candle is a c3 in a c3 Closure, then I would just trade the PM
session.
4. New York Reversal:
These are very similar to the continuation models, however, both of these NY Reversals use a
reversal into expansion candles which I already kinda talked about in the continuation models.

This is where 6AM is the reversal into expansion candle so because of this we can trade 6AM
which is very useful as we can trade 8:30 News and 9:30 NYSE open with. Additionally this
leads back into a 10 AM continuation.
The 10 AM reversal is where 10 AM makes a Reversal into the Expansion Candle. However this
would probably be my least favorite profile as it gives us the least amount of time to trade NY
sessions. However, it does support NY PM session expansion.

5. How to confirm a profile:

Now just because you have a profile, doesn’t mean you can trade it. You need to make sure that
the lower timeframe is also ready to expand. Because of this, while the HTF may show a
bullish setup, the market still needs to engineer liquidity, induce the wrong side, and
create displacement before expansion begins.The LTF confirms the actual shift — the
moment smart money engages.

Now to confirm the 4 HR profile, we used its aligned timeframe: the 15 Min.
Now a quick distinction with C3 Closures. Now in C3 closures you are supposed to wait for the
c3 candle to close. On the HTF’s and only the HTF, I am cool with trading the C3 candle as long
as we get a reversal / our confirmation pattern in C3.

For the C2 closure and Reversal into Expansion, we still look for our reversal / confirmation
pattern as that tells us that the LTF is ready to reverse aka our confirmation.
5. Reversal / Confirmation Pattern:

This is what the reversal pattern would look like. Basically it’s a SMT and a CISD. The SMT isn’t
mandatory but for the majority of the time you can easily find one.
In this photo you can see we had SMT and the CISD. You can also see how I marked that IFVG,
as the CISD took too long to form. Ideally you want to have a 2nd SMT that is the opposite of
the SMT you used to confirm the reversal. That is the double stage SMT. More on that in the
final chapter, but in theory it would look something like this.

See how our SMT that we used with the CISD came off another, opposite SMT. This shows that
the asset changed from the weaker asset to the stronger asset. This two-step sequence shows
the market’s internal mechanics: A transfer of strength is taking place and the asset that was
weak is now becoming the one smart money is defending. More on that in the final chapter.

Note: Using this pattern allows me to confirm the C3 closure. Remember in a C3 closure we
can’t expect a reversal on C2, we can now just confirm the reversal in C2 with this. Allowing me
to trade C3. However I only use this on the HTF as on the LTF, the strength isn’t there especially
on like the 1 min and 3 min.

Where this lies in MMXM is that this is a TIME based Smart Money Reversal shown though a
CISD and a SMT or Ideally a Double Stage SMT
Chapter 5: How to trade redistribution of MMXM with LTF Swing
Points

Now we understand how to catch the low or high of the day. However during a MMXM, we are
looking to trade continuations off of the Smart Money Reversal. Luckily most of the hard part is
over and it’s pretty simple from here.

First thing you have to know is your candle profiles: C2 Closure, C2 Reversal into Expansion,
and C3 Closure.
Note: On the LTF, I trade the C3 Closure where you have to wait for c3 to close strongly and
then trade C4.

Now basically what we are doing is taking 1 HR or 30 Min or 15 Min continuation PD arrays (
FVG and OrderBlocks) and looking for swing points, kinda like what we did with the 4 Hour
candle Profiles: Key PD array + Swing Point.

Now when we identify a key level on the 1 HR or 30 Min or 15 Min, we can use that level’s
timeframe or one of the timeframes lower than it. For example if we found a 30 M FVG, we can
look for a swing point on the 30 M or the 15M

As you can see we had confirmed the daily low though a SMT and a CISD. Now we see a FVG
and in it we created a C2 reversal into expansion. We will cover how to trade it on the 1 min or
3min or 5min. Now why didn’t we use the C2 closure, well it wasn’t confirmed on the LTF, more
in the next chapter.
Chapter 6: Entries on the Lower Timeframes.

Now the first thing we need to understand is once again to confirm the 1 HR, 30 Min, or 15Min
swing point. Once again this is very similar with the 4 HR profiles. Basically we are once again
looking for the reversal / confirmation pattern, but now on the aligned timeframes.
Aligned Timeframes:
​ 1 HR - 5 Min
​ 30 M - 3 Min
​ 15 M - 1 Min
So right now we have a valid swing point and need to confirm it. This is the 30 M timeframe so
we need to use the 3 min.

Now we are on the 3 Min timeframe and we see our reversal / continuation pattern where we
have our SMT and a CISD, confirming the swing point. Also you can see how this is a c2
reversal into expansion as the last black candle before the huge green candle is the 30 M
candle open, so quick CISD = expansion.

Now how do we enter? Luckily it’s pretty simple.

So I only use 2 entry models: Entry off the Orderblock created by the reversal / confirmation
pattern or just the breaker that sits higher than the Orderblock.
So as we can see on the 1 HR timeframe we have a swing point.
Then you can see our reversal pattern and an overlapping breaker in which we took an entry.
​ ​ ​ ​ ​ ​ ​
Chapter 7: Using News as Drivers for Price.
“News doesn’t move the market — the algorithm uses news as a delivery mechanism.”
— ICT, repeated in multiple mentorships and YouTube sessions
When traders see news events (like CPI, NFP, FOMC), they assume the volatility is caused by
fundamentals.
But ICT teaches that this is backwards thinking:
1.​ The market is algorithmically controlled.
2.​ Price delivery is pre-engineered.
3.​ News events are scheduled volatility windows the algorithm uses to mask liquidity raids,
induce retail, and deliver price to a predefined draw.
Based on this, news should act as a driver for price, but then how can I use this concept?
Well I’m looking for news to either be fuel to create a reversal and trade away from it or be fuel
to fuel a continuation off of a preexisting reversal point.

News I look for:

8:30 Red Folder USD News
9:30 New York Stock Exchange Open.

1. News creating the reversal point:

This is where news creates the swing point in either c1 or c2. After we create the swing point,
we do our normal protocol and confirm it with our reversal / confirmation pattern. So basically
news creates the swing point needed.

So in this example we see how we have 8:30 News. We can see how the news put in the c1
and how we expand off after taking 8:30 News Low.
Then we confirm on the LTF.

As we can see, we have our reversal pattern with SMT and a CISD. Once again we see heavy
expansion after news.

2. News continuation:
Sometimes the algorithm has already decided the low of day, and wants to protect it. In order to
do so, it uses news to expand away from the low or high of the day. Taking news's continuation
is very similar to when we traded LTF swing points. Basically the news helps us to predict where
c3 is going to go.
In this example we can see we have a Low of Day. Afterwards we can see how we have a c2
reversal into an expansion candle afterwards. So in theory 9:30 should be a c3 expansion.
However we still need to confirm it and we have to it a bit differently. I want to see the price leg
created by news to create a CISD such as this example
So we see how that 9:30 dotted line marks the start of the price leg and we get a CISD off of it
and we expand.
Chapter 8: Double Stage SMT and Targets

1. Understanding Importance of Targets:

When you define a draw on liquidity — …you now have a reason for the trade to exist.
You're not guessing.​
You're not chasing candles.​
You're aiming at something the algorithm is likely to deliver to.

“The algorithm moves from liquidity pool to liquidity pool. You must know where it's drawing
toward.” — ICT
A winning trade isn't just about being right — it's about being paid properly.
If you don’t have a logical, specific target, you’ll:
●​ Take profits too early
●​ Let trades run back to breakeven
●​ Be emotionally reactive​

But if you know:

●​ “This FVG leads to the old high”
●​ “This breaker block will draw to the 1h BISI”

…you can confidently hold the trade and scale out with purpose, not fear.

I personally target:
Session Highs or Lows
Failure Swings

2. What are Failure Swings?:

A failure swing is a swing high or low that fails to break a major level, but is used by the
algorithm to induce retail positions, build liquidity, and later target that liquidity during a
reversal or continuation.
A swing can take liquidity and still be a failure swing — relative to higher structure.
it can still be a failure swing if it:

●​ Fails to break a significant market structure level (e.g. a daily or 4H swing high)​
Leaves behind a wick and returns back inside the range
This is what I look for, so you can see how some failure swings sweep liquidity but are weak
overall moves, still creating failure swings.

3. Why are Failure Swings So Powerful?:

“If you see a clean swing that doesn't break structure, it’s bait. The market built it to be broken
— that’s where they feed.” — ICT

“Liquidity isn’t just found — it’s created. The algorithm engineers the market to draw in
traders on the wrong side.” — ICT

Failure swings do exactly that:

1. They Trick Retail Into Believing Structure Is Safe

Let’s say price drops, bounces, and makes a higher low, but never takes out the previous
swing high.

Retail sees this and thinks:

●​ "Okay, that low is solid support."

●​ They put buy orders above, stops below.

That failed low becomes a magnet for stops — the algo knows they’re sitting there.

👉 That’s liquidity, and it was engineered.

2. They Set Up “Obvious” Support/Resistance That Will Later Be Raided

The failure swing:

●​ Creates a clean high or low

●​ Looks like a textbook reversal level
●​ Retail places:
○​ Buy stops (breakouts)
○​ Sell stops (breakdowns)
○​ Or positions against it with stops just on the other side

Smart money has now engineered a cluster of orders just outside the failure swing.

3. They Force Reaction Before Real Expansion

After a failure swing forms:

●​ Price consolidates or pulls back​

Retail gets comfortable
●​ The algo then returns to the failure swing and runs it, clearing the engineered liquidity

This run:

●​ Hits the stops

●​ Fills smart money orders
●​ Leaves imbalance (FVG)
●​ Then reverses in the true direction — the real move begins

“That high was never resistance — it was an inducement. It created the orders the
market needed for the real delivery.”​
— ICT

4.What is Double Stage SMT?:

A Double-Stage SMT (Smart Money Technique) is a two-phase divergence sequence
between correlated assets that reveals a shift in smart money sponsorship, and often
precedes a high-probability reversal and expansion.
Stage 1: Initial SMT Divergence

●​ Asset A makes a lower low

●​ Asset B holds a higher low​
This shows early relative strength in B → smart money is starting to support it​
But it’s not yet confirmed — price may still be hunting deeper liquidity

Stage 2: Opposite SMT Flip (Strength Transfer)

●​ Asset A now makes a higher low​

Asset B makes a lower low​
This shows a shift in sponsorship — smart money is now defending Asset A​
The market has chosen its delivery vehicle → expect expansion to begin

5.When to look for a Double Stage SMT?:

A lot of traders always look for SMT randomly. Personally I only use SMT as a confirmation and
this double stage SMT as a stronger confirmation. The problem is that we only want to use this
double stage SMT at key PD arrays and at Key Times.

So there are 2 types of double stage SMT:

​ HTF to LTF SMT
​ Close proximity highs and lows

HTF to LTF Double Stage SMT Divergence:

As you can see we have a HTF SMT. Now when we look for our LTF entry, we are once again
using that reversal pattern.

As you can see we got our reversal pattern on the LTF, but thought that we got a LTF SMT. This
shows the market has switched strengths at that time allowing us to catch expansion.

Close Highs or Lows Double Stage SMT Divergence:

Very similar concepts just where the SMTs’ are close together on the same timeframe.

Now I only look for the Double Stage SMTs’ when finding a swing point such as a 4 HR Profile
or a 1HR, 30M, 15M LTF swing point. The swing point or it’s c2 candle should create a SMT.
OR I would look for another SMT when we are looking to confirm the Swing Point with our
Reversal Pattern. Remember since we can do it on all timeframes, it’s really just a miss and
match.
Note: IF we don’t expand off of double stage SMT = it’s a fake SMT
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