Transcript for:
Enhancing Trading Strategies with SMT Divergence

hey guys what is up this is going to be a very chill educational video um this is not a new strategy or new thing it is the old strategy but I'm going to teach you something uh that's going to improve your win rate so for example if you were getting around 40% win rate you were going to get around 60% 65 and even 70% this is a very powerful technique that most people sleep on they just avoid using this because they're lazy and if you and I know a lot of people who trade are lazy they always opt for the easiest methods to make money with trading but if you can imp implement this one small thing that I'm about to teach you in this video I promise you your win rate will go higher so by now on my YouTube you may have watched external range to internal range liquidity videos right now they work phenomenally well and this is and that is like my bread and butter model right I use it every single day and if it's present I'm going to trade it without thinking anything else but I've been implementing this one small tip that I'm going about to teach you in this video and in my recent trades I have been implementing that in my recent trades and it has helped me significantly so let's suppose that on EU we took out erl on the daily time frame so remember the time frame alignment right we have the daily time frame then we have the 1 hour and then we have the 5 minute 4our entry and this is the time frame that I trade you can trade the week 4 hour and 15 minute and other ones that I've thought before I'm not going to go into detail in that so I trade this one most of the time this time frame so on The Daily I look for uh erl Purge once that happens usually normally what I would do is I would then look to Target this fair value Gap after confirmation so once the erl was taken I would then look for a market structure shift on the 1 hour time frame and then I would wait for pricee to come back back into the 1 hour PD then look for another Market shift on the 5 minute and then we target this low right but for me that is just so much work right to to look for like three Market structure shifts sorry two Market structure shifts that is something that a lot of people just and I'm I'm not I'm not going to lie I'm I'm I'm quite lazy myself I always opt for the easiest methods but you know trading is hard if it was that easy everyone would be rich so what I mean by this is the thing I'm about to teach you is called the smt Divergence confirmation all right now hear me out okay I'm going to teach you the exact way to use this and that's going to just blow your mind mind how well it works okay so instead of looking for you know the 5 Minute Market structure shift as well what you want to do is on the daily time frame so there are two ways to use this technique so listen very carefully on The Daily time frame you first of all look for smt so basically if you looking at your USD you would look at gu right so let's assume that on your USD we took out the high the we took out the external range liquidity and we have internal range liquidity here but on gu what happens is we create a high but then we fail to create uh to take it out so on EU we took out the high we took out the external range liquidity but on gu we failed to take out the external range liquidity now that my friends is smt Divergence but smt is not confirmed yet all right so to confirm the smt what we will do is we will look for one hour Market structure shift on your USD before price takes out this high so let's suppose that the market sh shift doesn't happen on EU right and after some time price takes out the high on gu as well and on EU we didn't get market then that smt is invalid however if price stays below this high and then we get a 1H hour Market should just shift as soon as that happens your smt is confirmed so that is a perfect SMP that is confirmation that we are going to go down now once you get the 1our market shift instead of looking and dropping down to five minute time frame to look for another Market shift Market structure shift I'm going to directly enter from the PD array that is presented to me on the 1 hour time frame after market structure shift so that would be my entry and I'm going to take some partials along the way and then I'm going to Target this as my lost Target now that is one method on how you can Implement smt Divergence into your trade but most of the time what's going to happen is you will not get smt on the daily time frame because that is a very high time frame right uh it's not the highest but it is a high time frame and looking for smts on the daily time frame can basically be um quite hot not hot but it's very uh I wouldn't even say rare but it happens not that much all right it happens but not that much so you do not want to be sitting on your hands and looking for smt on the daily time frame yes of course if you look at all these other prayers you will definitely find two or three setups per week um and sometimes even more but let's assume that you do not get smt Divergence on the um the daily time frame so what you would do is then you would normally look for a 1hour market struct SH now what that does it confirms the bias that we're going to go towards the internal range liquidity so remember price only does two things it goes from external range liquidity to internal range liquidity or from internal range liquidity to external range liquidity external range liquidity is every single high and low and internal rity is a fair value Gap all right every single fair value Gap so now that you get a market stru shift on the 1 hour time frame then you can look for smt on the 1 hour time frame so this is how it's going to look like all right so basically price creates another high on the 1 hour time frame so you get a market structure shift and you also have a buildup of liquidity or a high right and then on EU we go up ahead and we sweep out this High over here now once we sweep out that high we want to look at gu did we sweep out the high on gu as well so let's suppose that this is gu right if we haven't taken out the high on gu but we took out the high on EU after the 1our market structure shift then that could become an smt Divergence but we will drop down to 5 minute time frame and then we will look for a market structure shift that is going to confirm the smt Divergence guys listen to me very carefully what I'm teaching you right now I know this sounds this may sound a bit complicated and useless to some of you but I promise you it works really really well I'm going to give you guys a couple of examples as well please listen to me implement this in your trades no matter what model you are trading just do this okay so you would then look for a 5 minute Market structure shift and once you get that you target this as your first Target the 1 hour low and then you target the daily time frame internal range liquidity s Divergence is basically a cheat code in your trading model if you use it your win rate will go higher who doesn't like a higher win rate guys okay so that is pretty much it just look for smt divergences there are two methods the one is looking uh for smt on The Daily then the other is looking for it on the 1 hour time frame now let me give you guys some examples all right guys so here is example one on how I would trade this entire setup right so on your USD you can see that we created a higher high higher low and then a higher high but if you look at the same highs and lows that were printed on gu so we have this High over here so this high is this high on EUR USD but notice what happened here we failed to take out this high on gu but on EU we took out this High over here now the SM smt is still not confirmed so to confirm it further you can also see that after we took out erl we had this fair value Gap in the discount right so that is our draw on liquidity on The Daily time frame now of course smt is still not confirmed why because we want to see um we want to see a market structure shift on the one hour time frame right so let me just mark this out real quick let's drop down to one hour time frame here so you can see right around this level what do we have we have a shift in the market structure and we still failed to take out the daily high that was on the GU so our smt Divergence is confirmed now what you can basically simply do is just take your entry from any inefficiency that is present right so you can basically see we have this fair value Gap that you could have taken your entry from now if we look at it here so let me just do the analysis correctly okay perfect so we have another smt on the um the one hour time frame right so let me just show you where it is so if you look at it here closely this high on EU right and also look at this high on gu now if I mark this High out like that you can see that this high was not taken out on gu so let me just go here real quick this is the high right and it goes to this this level all right perfect and also somewhere around here so this was a smt on the 1hour time frame as well now to confirm that smt Divergence what we would do is we would simply drop down to 5 minute time frame to confirm it even now since we had smt on the daily time frame we can basically take our ENT directly from this level right you can also see we had this auto block here that you can have taken your entry from but now let's drop down to 5 minute time frame and see what happened so if I zoom out a bit like that you're going to see that that this is when we were not in the Kill Zone time so remember we want to be taking our entries since we are tra if we are trading on the 5 minute we want to be trading during the Killzone hours that is very important right and you can see that we have a bunch of liquidity here and we have original consolidation just around here so that is a bunch of liquidity buildup equal lows around this level and also the market maker model is present here so now you can clearly see that we got our shift in the market structure some somewhere around here right after we tapped into that PD rate that we discussed before and that makes the win rate the uh probability even higher so just around here first of all what do we have we have the change in the state of the delivery I do not recommend that method I always wait for the lows to be broken for a market shift to be like to be you know powerful uh change of state change in state of delivery is also good but I always recommend that you look for Market structure shifts so now what do do we have here we have a breaker block and of course this is with the benefit of hindsight right uh uh it just it could be different if you are looking at it on in the live markets right you might be taking your entry somewhere around here or here but I'm showing you how well it works so we have a breaker block right look at the Precision here we tapped right into this and we had a beautiful Drop to the downside so if you took your entry on the 1 hour time frame you would be fine right you would AB absolutely murder it so let me just shot it right here you stop would go right above the auto block right and you could have basically taken 1 to two or even 1 to 2.5 because this is our draw on liquidity around here so I know uh this is too much to consume but if you have been watching my old videos this should be easy for you and this should be easy for you to understand you know look for smts in the key levels so for example when erl is taken out right look for the smt first of all on the daily time frame if the smt is not present on The Daily then look for look for it on the 1 hour and remember smt is always confirmed when you get a market shift on the lower time frame so for example if you get smt on the 1 hour time frame you would look to uh confirm the smt by dropping down to the 5 minute time frame and looking for a market structure shift before the other per asset doesn't take out the high right so for example if this high was taken on EU you wouldn't expect gu to take out the high before you get a market otherwise the smt will be invalid guys guys so uh let me give you guys one more example all right guys so here is another example looking at NAS 100 and us30 so here are some correlating pairs that you can look uh for smts on right so for assets you would look for at NAS 100 S&P 500 and us30 whichever one presents the smt you can use these three to find smt now for the Forex paers you can look at your USD and gbpusd you can also look at dxy you can look at audusd and nzdusd right you can look at um AUD JPY and nzd JPY you can also look at um G gpy and um uh sorry USD JPY right so just try to pair them up um and you will find smts so in this example you can see that on NAS 100 we took out erl and just above it what do we have we have IRL so now we want to look for smt somewhere around here so if you look at this low here on NAS 100 this is the low but on um on us30 this is the low right so you can clearly see that on NAS 100 this low was swept but on uh us it was not swept now we want to look for a 1hour market structure before we can confirm that this is an smt Divergence right so if I go to the one hour time frame here and I just zoom out a bit you can see that just around here your smt Divergence would be confirmed right so around this level your smt is going to be 100% confirmed why because on NAS 100 we took out the erl but on um USA we fail to took out the erl so that is SM smt Divergence very simple there's literally nothing complicated about it so right away you can see is you can basically directly enter all right directly enter into the trade without dropping down to the 5 minute time frame why because we got smt guys this is literally all you guys need we have equal highs over here which lead into the IRL on The Daily time frame so on the retest of this auto block plus breaker block right whatever you want to call it you would take your entry and of course the r reward is quite Less on this trade so what you would practically do there are two things that you can do is basically reduce your stop loss to to this low why because once this low is swept there is a very less chance that price will come back again to sweep this low or what you can do is Target the 50% of this range so that would be somewhere around here so you can see uh just around here that would be a perfect Target you can basically put your stop here that would give you one to two risk to reward ratio so I hope by now everything is perfectly clear guys I really really really suggest that you guys use this technique in every single model that you trade just look for smt to confirm your Market Su shifts whenever price comes into some form of pdra or um whichever model you're trading just Implement smt and you will thank me so thank you so much for watching guys before I end the video I just want to quickly let you know that my brand new course the fazz SMC 2.0 course is coming out very soon it is also it is already up for the old Discord members for absolutely free so if you join right now if you become a member of my current course plus Discord you will get access to my new course for absolutely free but once the new course is out it will be sold separately I'm not telling you to buy it or anything my YouTube videos alone will get you funded and everything but if you really want to like connect with me and watch something that I have never revealed before or watch the videos that are in correct order so from you know a proper guide from beginner to advanc then it is for you anyways I'll end the video right now thank you so much for watching I'll see you guys next weend