Ahh, the debate about the Smart Money concept…
We ain´t going to dig into what the concept operational parts are, as the operational parts still can be correct. But focus more on the concept that there´s Smart Money and thus by the same logic of language …. dumb money.
And if you ain´t doing what they do, you´re thus … dumb money? How are we as retailers supposed to do what Smart Money do when we don´t have access to the same tools? that´s kinda rude isn´t it? One uses a whole math team and advanced robotic excavators, and retailers use a shovel, but somehow we are supposed to dig the same hole.
And unfortunatly often used in a way to create a psychological burden in the reader, that results in us opting in to use/buy something that removes the load. And most likely doesn´t solve the “do what Smart Money does” at all. Because no one wants to be concidered dumb…
Does Smart Money even exist?
Smart Money does truly exist, but how the narrative claims it expresses itself in the price charts isn´t a defensible claim.
The truly smart things done in trading and markets by those defined as Smart Money, are those things not even possible to access from the outside.
So what is it Smart Money Concept smuggles into the charts?
Here’s what SMC actually claims:
This candle formation is the result of Smart Money actions. And we can thus suggest this action will follow.
But that formation was built by multiple Smart Money players simultaneously, on opposing sides…
And it´s impossible that on the opposite side of this, is just retailer positions.
Which leads to the conclusion that if Smart Money don´t do the exact same actions to a “candle setup”, then by logic some Smart Money needs to be …. dumb (by SMC).
We´re left with the fact that a candle formation contains Smart Money on both sides. Yet acting in opposite direction to the same candle formation.
Can we then distinguish which one of these Smart Money is correct?
Short answer: No…
Can both be Smart Money?
Short answer: Yes. But not in SMC…
Are you dumb money?
Only if we buy into the thesis that price movements are caused by a Smart Money player and the opposite side is always retailers. Which by modern market operations is impossible.
