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Listen, I want to share something interesting that radically changes the approach to trading in crypto. It's about smart money — it's not just another indicator, it's a completely different way of looking at the market.
The entire market is conditionally divided into two players: whales with huge capital and the crowd of retail traders. And here’s the point — big money always acts against the expectations of the majority. Whales play on emotions (FOMO), move the price in their favor, and then take profits, leaving ordinary traders with nothing. Classic technical analysis with its patterns and indicators? That’s a manipulation tool. A beautiful triangle is broken in an "illogical" direction, strong support is broken with an impulse, hamster stops are taken out — all according to the big player’s plan. That’s why 95% of the crowd loses their assets.
Smart money strategy teaches you to see these manipulations and trade along with whales, not against them. Let’s start with the basics.
The market has three structures: upward (bullish trend with new highs and rising lows), downward (bearish trend with new lows and falling highs), and sideways movement (flat, where there’s a balance between buyers and sellers). Identifying the current structure is the foundation of all analysis.
When the price moves sideways, whales accumulate positions. They need liquidity, and they hunt for retail stops. A price move outside the trading range is called a deviation, and it’s often a signal of a reversal. Entry can be made on a sharp breakout and initial attempts to return back.
Next important point — Swing. These are reversal points of the price. Swing high consists of three candles: the central one with the highest high and two neighboring ones with lower highs. Swing low, conversely. These levels act like magnets for the price because liquidity accumulates there.
Liquidity is the "fuel" for big players. In practice, it’s retail stops usually placed beyond obvious support and resistance levels. The whale fills these orders with impulsive movements, building its position. The largest clusters of orders are liquidity pools behind significant highs and lows.
There is a pattern called SFP (Swing Failure Pattern). When highs and lows are equal (double bottom or top), the whale updates these levels with a candle shadow’s impulsive spike, taking out stops. After the candle closes, you can open a position, placing the stop behind the shadow.
Imbalance (IMB) is a long impulsive candle whose body "tears" through the shadows of neighboring candles. It’s a mismatch between buy and sell orders. The price will tend to close this "gap," like a magnet. Entry at 0.5 Fibonacci retracement.
Order block (OB) — a place where a large volume was traded by a big player. Here, key manipulation of liquidity occurs. In the future, such zones act as support or resistance. Bullish OB — the lowest descending candle, bearish — the highest ascending candle. Optimal entry on retest of the OB or at 0.5 Fibonacci of the candle’s body.
Divergence — when the price moves in one direction, but the indicator (RSI, Stochastic, MACD) in another. This is a reversal signal. Bullish divergence: price lows decrease, but indicator lows increase. Bearish divergence, vice versa. The older the timeframe, the stronger the signal. Triple divergence is a very powerful setup.
Volumes show participant interest. Rising volumes in a bullish trend indicate strength, falling volumes — weakness. If the price is rising but volumes are decreasing, it could be a sign of a reversal downward.
Three Drives Pattern (TDP) — a reversal pattern with a series of higher highs or lower lows. Usually forms near support or resistance zones. Entry when the price enters the zone or after forming the third extremum.
Three Tap Setup (TTS) is similar to TDP but without the third lower low or higher high. It’s a big player’s task to accumulate a position. Entry on the second move (collecting stops) or on the third retest of the zone.
Trading sessions are also important. Asian (03:00–11:00), European (09:00–17:00), American (16:00–24:00) Moscow time. Usually, accumulation happens in Asia, manipulation in Europe, and distribution in America.
CME (Chicago Mercantile Exchange) trades from Monday to Friday. Trading starts Monday at 01:00 Moscow time and closes Friday at 24:00. On weekends, gaps form between CME prices and crypto exchange prices, which trade 24/7. These gaps act like magnets — the price tends to close them.
Indices like S&P 500 and DXY influence crypto. S&P 500 rising — BTC usually rises. DXY rising — BTC falls. It’s important to consider these for the full picture.
That’s the thing — smart money. It helps you see the manipulations of big players and trade along with them, not against. If you understand this, you can start earning like whales, not losing your deposit like a hamster. Save this if it’s useful, and good luck in trading.