For many years of trading, I’ve learned one simple rule: there are always whales and small fish in the market. And if you want to make money, you need to understand how whales think. That’s the essence of smart money—analyzing the behavior of large capital.

You see, big players (banks, hedge funds, institutional investors) manage enormous volumes. They can influence prices and manipulate assets in their own interests. And small traders, the crowd, usually act emotionally—chasing FOMO, panicking during declines. Whales know this and play on those emotions.

Why do you need a smart money strategy? To learn to spot these manipulations. To understand when a whale is building a position, when it exits, and where it sets traps. It’s a completely different view of the market than classic technical analysis.

Classic technical analysis is what 95% of the crowd uses. Beautiful triangles, patterns, support-resistance levels. But the problem is: whales know what the crowd is looking for, and they intentionally draw these formations for it. Then they break them on the “illogical” side, taking out the stop-losses of hamsters. That’s why most people lose money.

In smart money, everything is different. The market has three structures: an uptrend (a bullish trend with new highs and higher lows), a downtrend (a bearish trend with new lows and lower highs), and sideways movement—a flat, when price oscillates between levels with no clear direction.

When price breaks out of the sideways range boundaries, this is a deviation. Very often, it signals a reversal. The whale exits the range, collects liquidity (the stop-losses of small traders), and then returns back. This is how you can catch good entries.

Structural reversal points are swings. A swing high consists of three candles: the middle one has the highest high, and the neighboring ones are lower. Reversal down. A swing low is the opposite—the middle one has the lowest low, while the neighboring ones are higher. Reversal up.

A very important point is the break of structure. Break Of Structure (BOS) is a structure update within the trend. And Change of Character (CHoCH) is a change of trend. The first BOS after a CHoCH is called Confirm and confirms the change.

Liquidity is the fuel of smart money. In practice, it’s the stop-losses of small traders, who usually place them behind obvious support levels, outside the boundaries of chart patterns, or behind the wicks of candles. Whales hunt for this liquidity, collect it, and load their positions with it. The largest concentration of orders is located beyond significant highs and lows—these are liquidity pools.

Swing Failure Pattern (SFP) is when equal highs or equal lows (double bottom/top) are broken by an impulsive candle “piercing through.” The wick breaks the liquidity zone, but then the candle closes back inside. A classic entry setup is: after the SFP candle closes, place your stop-loss behind its wick.

Imbalance is the imbalance between buy and sell orders. On the chart, it’s a long impulsive candle whose body breaks through the wicks of neighboring candles. To restore balance, price will tend to move back and cover this zone. Entry at 0.5 Fibonacci of the imbalance.

Orderblock (OB) is the place where the whale traded a large volume. This is where key liquidity manipulation happens. In the future, an OB acts as support/resistance and a magnet for price. A bullish order block is the lowest bearish candle that absorbs liquidity. A bearish order block is the highest bullish candle.

Divergences are the mismatch between price and an indicator. Bullish: price lows are decreasing, while indicator lows are increasing—this is a signal for an upward reversal. Bearish: price highs are increasing, while indicator highs are decreasing—a downward reversal. The higher the timeframe (the older it is), the stronger the signal.

Volumes reflect the real interest of market participants. Rising volumes during an uptrend show strength, while falling volumes show weakness. If price is rising but volumes are falling, this may signal an upcoming reversal.

Three Drives Pattern (TDP) is a reversal pattern with a sequence of higher highs or lower lows. It usually forms near a support/resistance zone. Three Tap Setup (TTS) is similar to TDP, but without the third extreme. It’s a setup of a large player taking a position.

Trading sessions are important. Asian: 03:00-11:00 MSK. European (London): 09:00-17:00. American (New York): 16:00-24:00. Within the day, there are three cycles: accumulation (usually Asia), manipulation (usually Europe), distribution (usually America).

CME—Chicago Mercantile Exchange. Trading runs from Monday to Friday. Bitcoin futures are traded here. The exchange is closed on weekends. Between the weekend and Monday, gaps often form (price gaps). On classic crypto exchanges, trading runs 24/7, so the price can change over the weekend. When CME opens on Monday, a gap may appear. These “gaps” are a magnet for price, and price tends to fill them.

Crypto depends on the traditional stock market. S&P500 is an index of the 500 largest companies in the United States. It has a positive correlation with Bitcoin. When S&P500 rises, BTC usually rises as well. DXY is the dollar index. It has an inverse correlation with crypto. When the dollar strengthens, crypto usually falls. You can’t ignore these indexes if you want to understand what’s happening in the market.

That’s the smart money strategy. It helps you see the manipulations of large players and understand their logic. If you master this method, you’ll be able to trade alongside whales, not against them. That’s what separates successful traders from the rest. Save this material, subscribe to the channel, and good luck with your trading.