SMT Divergence | Coconote

welcome back to another lecture as always if you have any questions then feel free to ask me at the end of the presentation for those that are asking me on YouTube feel free to join my free community on Discord and ask me questions there as I can easily answer your questions whereas in the YouTube comments I can't really post any screenshots examples stuff like that in this lecture I will be covering smt Divergence and why it is extremely important to my model and in my opinion to any ICT strategy if there was one concept from ICT that I would label theote Holy Grail it would be smt Divergence so what is smt Divergence smt Divergence is the acronym for smart money tool so the long form of smt Divergence is smart money tool Divergence you may hear others say that smt Divergence is a cracken correlation and essentially what this means is that smt Divergence is a price signature that occurs when correlated markets don't move in tandem with one another this is significant because it tells us that there is some sort of institutional sponsorship going on in the markets and so before I dive any deeper into smt Divergence the prerequisite to spot smt Divergence is to understand basic Market structure so if you don't know much about Market structure make sure that you learn that first so for example higher highs higher lows lower lows and lower highs when using smt Divergence in the right context you will be able to find trade ideas that immediately run in your favor and so this is the main reason I love smt Divergence and why it is such a crucial component of my model smt is how I find turtle soup setups and in my opinion smt is Turtle soups in my opinion I'm not 100% sure if this is correct but from my screen time and experience it has proven to be true when looking at correlated markets they should move in tandem meaning that when one market makes a new swing point so should the other in this diagram there is no smt Divergence because the markets are moving in sync when Market a on the left makes a higher high or a lower low Market B on the right also makes a higher high or a lower low so here's that example of no smt Divergence right where correlated Market a is making a higher high which means Market B should also be making a higher high therefore in this diagram there is no smt Divergence vice versa when correlated Market a makes a lower low correlated Market B should also make a lower low so in this case there is no smt Divergence because they both are doing what they're supposed to do in this slide I have created a diagram to show what smt Divergence looks like in the markets so compared to the diagram in the previous slide we can see that market a a on the left makes a higher high or lower low whereas Market B on the right fails to create a new higher high or lower low when this occurs this is smt Divergence and is a price signature that indicates some sort of manipulation is occurring so here on the left once again you have correlated Market a making a lower low so we're expecting correlated Market B to also make a lower low but in this case it makes a higher low right low High lower low low high higher low right so that cracking correlation is what we call smt Divergence and vice versa here we have corer Market a making a new higher high which means Market B should be making a new higher high as well but in this case it fails to make a higher high it makes a lower high right so this would be smt Divergence when you get smt Divergence on the lows this is a bullish signature so we're looking for bullish price action after this occurs whereas if you get smt on the highs you are looking for bearish Price action as that is a bearish signature as I mainly trade index Futures I only know a few correlated assets so for index features I refer to NQ es and ym XY is also applicable but I would look at it for longer term correlations another use case for dxy that I use personally is if NQ es and ym are not providing immediate feedback I will refer to the dollar Index as well for Forex I only analyze EU so the correlated assets are EU gu and dxy for crypto it would be Bitcoin and ethereum one thing to note is that dxy is inversely correlated so that means the chart is qu upside down in relation to most assets so here's an example where let's say this chart on the left is EU or NQ and this chart on the right is dxy so here when EU or NQ makes a higher high on dxy since it's inversely correlated meaning it's upside down we're looking at the lows when we're looking at the highs on EU so let me reiterate that on EU or NQ for example if we're looking at the highs then on dxy we're looking at the lows as they are inversely correlated so now getting a bit more in depth of why smt Divergence is so important surrounds the idea that it is the first sign of institutional sponsorship in the markets as trading alongside smart money is the whole premise to ICT and so with that logic in mind you will find that smt Divergence occurs at the beginning and end of every Trend yes I just said that let me repeat it you will find that SM T Divergence occurs at the beginning and end of every Trend so I hope you are able to grasp how significant that is because I basically told you that this concept will spot reversal for you when applied in the right context this means that smt Divergence will help you find the high or low of x x being a variable that represents any defined range in time so for example X could be the year the month the week the day the session so because smt Divergence is able to help you spot reversals of the market it can also help you spot the high or low of defined ranges in time another use case of smt is that it indicates when accumulation or distribution phases are complete in Market maker models so for those that are having trouble spotting specific phases of a market maker model you can use smt Divergence to gauge when a phase has been completed and so not only does smt indicate the high or low of a defined range in time but it also indicates that the market is ready to expand now that you understand what smt is this is how I personally like to apply it the first thing is to use smt divergences to spot phases of Market maker models and Within These phases is where my model resides when looking for smt Divergence I am always looking for them to occur within a higher time frame key level this is also where I've seen the occurrence of stacked smt Divergence which I haven't heard anyone else talk about so in a future lecture I'll cover this here is a diagram of what I mean when using smt in Confluence of Market maker models most Educators usually teach to look for smt only at the Smart money reversal but when using smt it can also be applied to different phases of the market maker model by studying this and understanding this you will be able to identify why explosive price movements occur and so here I want to explain correlated Market a correlated Market B so here we have a market maker model right Market maker buy model so at every phase in the market you will find smt Divergence so let's say you have the origin consolidation this would have been the previous Market maker sell model right it would have been that previous Market maker sell model smart money reversal it turns into original consolidation so here to identify our first distribution phase we find that smt Divergence and most likely you will have expansion in the market after that occurs once that occurs you're looking for your smart money reversal smt Divergence once again right so Market a making lower low Market B fails to make that lower low same thing over here with the other phases smt Divergence on the highs for the distribution phase where Market a makes a higher high Market B fails to make the higher high right and then in the original consolidation Market B makes a higher high Market a fails to make the higher high that'll be smt Divergence and so finally we have the accumulation phase where in Market a makes a lower low taking out that liquidity and then Market B it fails to take out that low and so a lot of times people that are only fixated on one market let's say this is es right here on the right side and it's NQ on the left side well when people are looking for a liquidity sweep on ES and they don't get it it's because smt has occurred within the markets and then we have the exact same thing here but in a market major sell model format so I just flipped around the charts um this distribution I usually look at it as accumulation so I accidentally didn't swap these but be original consolidation accumulation where the distribution is uh just swap that with accumulation smart Runner reversal up here and then we have distribution so just swap around the distribution accumulation phases and so with each phase you'll be able to identify with that smt Divergence on the highs for bearish Price action right and then on the lows for bullish price action so removing some of the lipstick of the market maker model and adding the higher time frame key levels this right here is exactly what I look for in all my trades so I'll be usually looking at a higher time frame Market maker model and so we look for that higher time frame key level so let's say this is an hourly Market maker buy model and whenever we look for smt Divergence we're looking for it to occur within a higher time frame PD array so in this case it would be an hourly PD array and I would drop down to the 5 minute look for that smt Divergence look for lower prices if that makes sense and then we have the same thing once again vice versa so this is a m uh Market maker cell model and so when I'm looking for um cells on the right side of the curve I'm looking for that hourly Fair Valley gap smt on the highs within that high time frame Fair Valley Gap or whatever PDR you want to use and then look for cells going lower into the original consolidation and so this setup right here is the Silver Bullet setup that ICT love so much same thing over here on the left side of the curve this would have been a market maker buy model model right before we turn into a market maker sell model and so this right here this would be that Silver Bullet setup for a market maker Buy Long setup right so that would be this right here now that you understand what smt Divergence is I'm going to be showing some trades I took based on smt Divergence as this concept is a crucial part of my model in these first examples they are just simply using smt Divergence and Market maker models together to trade and once again my model is just higher time frame PD smt Divergence within it and then I look for lower time frame structure and number four would just be that trade Management in this first example we can see a market maker buy model and this was annotated live with the Discord so make sure you check that out if you want to join so getting into the example we can see how smt Divergence helps identify the phases of a market maker model a great way to use smt Divergence as well is not only entries but also for trailing stop losses and so here I just want to explain we have identifi the original consolidation the distribution phase with smt right so smt on the highs here but smt on the highs here and then we had smt on the lows here smt on the lows here smt on the lows here and so I took a long from down here and so to Trail my stop loss every time I see an smt Divergence this is a very general way that you can do it as well that is very effective in my experience um how I tra Trail my stop loss is a little more advanced as I use every PD array to kind of Trail and follow orderflow but smt Divergence is a great way to Trail your stop loss so every time I see some sort of accumulation phase um in this market maker buy model for example if there's smt Divergence then I'm not afraid to put my stop loss at this low right here right this low because I know that this low should not be taken out since there's smt Divergence that occurred here and so once again waiting for price to do whatever it's doing trades below this low creates that smt Divergence you can Trail your stop loss to this low now right and then Target that final original consolidation so here's the second example and it's exactly the same thing but now it's a market maker sell model right so we have this original consolidation here with smt Divergence confirming that the previous Market maker buy model had had been um that was the smart money reversal for it and so once we create this new smart money reversal this became original consolidation so here we can see there's a lot of equal lows here perfect for draw liquidity and we had this retracement accumulation right here smt Divergence telling me that this accumulation phase has completed and so once we have this smt Divergence we're looking for higher prices right and so on these highs we have smt diver Ence as well and so that was indicating to me that we were about to have our smart money reversal and right here we have that smart reversal trade lower get that market structure shifted you're trading that 2022 model right and so right here we trade back into this Fair valy Gap and something I want to mention is you can have smt Divergence with fair value gaps as well that's also another thing I don't really hear people talking about but I'll just put it out there that this is something I see all the time where one market will trade back into a fair value Gap the other Market will leave it as a breakaway Gap and then that's smt Divergence in my head and the reason I would say it's smt Divergence is because if you drop down to a lower time frame for example as price is fractal this fair value Gap um low would be a swing high on a lower time frame and so right here we have that smt Divergence distribution this is where I entered the market right here on this uh it's a balanced price range right here but I'll just call it a fair value Gap and so we drop lower and then ultimately into that original console audition right and last but not least here is the third example and once again exact same thing right um this one I actually had the executions on chart because my previous annotations those ones I executed on ninja Trader so I don't have the annotations for that but you still get the same idea and honestly I I would say this is the cleanest example I have of using smt with Market maker models and so this was a trade I took on the 15 second if I remember correctly and so here we have right once again original consolidation we had smt prior to this we have Distribution smt on the highs right here right and then after we had redistribution another smt on the highs help me confirm that and so right here smart money reversal we had an S&T on the the lows I forgot to I guess I forgot to annotate it here um smt on the lows and on top of that this occurred right at 9:00 a.m. um if you study quarterly Theory you'll understand the significance of that but for now I'm just going to leave that as it is because I'm only talking about smt Divergence in this lecture and so once we have that smart money reversal looking for our first accumulation phase and so once we had this smt Divergence on the lows that's when I pulled the trigger and I was targeting that first redistribution high and so once we took that out I partialed 50% here get some sort of retracement trading higher right and then once we take that second distribution High partial to another 25% right there right and then right here we have another smt Divergence and then from this point on once we have smt Divergence I'm expecting these lows not to be taking anymore and that's why whenever I enter my trades if it if I am correct cor then you will see that my trades quickly go in my favor the reason is because I'm using smt Divergence to identify which low is the manipulation low and so right here the second reaccumulation right here smt Divergence you can Trail your stop- loss up to this low for example and we should see expansion higher which we never revisit this low right so we see expansion higher finally tapping into that original consolidation and the first tap I didn't really take profit but the second one I was like like all right it's looking a little suspicious so I just closed and I didn't actually close at the original consolidation High I think I closed somewhere in this area right here once it tapped into it traded lower because we didn't get any sort of displacement past that point moving on to the next example I wanted to show you guys how I frame my trades based on a higher time frame Market maker model and if you've watched my previous video on my model then you would understand that this is exact ex actly what I look for in my majority of my trades the only difference between this and that video is that I am implementing smt Divergence to it confirmed the market is ready to expand this is why by understanding my model extremely well I know that if my entry is valid it will go quickly in my favor so in this example it is an hourly Market maker buy model framed from a daily inefficiency here right Market maker buy model we had smt prior to this creating that original consolidation or you could say it's a smart money reversal for the market maker sell model that was occurring on the left side of the curve here right we have our original consolidation distribution phase smt on the highs right confirming that we're ready to go and you can notice every time I annotate smt Within These phases you see expansion right away once again here redistribution smt on the highs expansion right away so down here we finally got that smart money reversal right smt on the lows and so we started to what displace higher so the second we have smt Divergence we expand in the market so this fair value Gap is where I was looking for and operating within and so this right here was um I'd say these setups are generally what I call A+ setups and then um in the next segment of examples I will show you guys a ++++ setup for my model specifically so dropping down down to the 5 minute this is the price action we were looking at so this yellow box was that hourly Fair Valley Gap and then that blue box was the accumulation phase and so in this slide I have removed the higher time frame annotations and made it a little cleaner and this is the screenshot of exactly what my model is right so here I wanted to mainly highlight the smt Divergence that occurs at the lows here and so this is where I took my first buy since this was a smt Divergence I'm looking for within a higher time frame PD array right and remember this is all higher time frame context that makes this possible on the lower time frame is that you need that higher time frame context I understand we're in a market maker buy model on the higher time frame right to go higher and so this is also where I want to kind of show you guys why smt Divergence I view it as turtle soup and so here I'm expecting accumulation right this is just a generic accumulation manipulation distribution right you can also look at this as a market maker buy model on a smaller scale but here I'm just going to say it's accumulation manipulation distribution as it's not the cleanest Market maker buy model here and so here once we had that smt Divergence on the lows with this hourly Fair Valley Gap right and that was turtle soup I went onto the 15-second chart from the 5 minute chart and I looked for my entry right here once I got my entry in here I was just managing my trade right once you have that smt and once again this is why by understanding my model if my entry is correct I should see expansion in my favor right away right so smt expansion right away and then once we dig lower into here I'm looking at this as some sort of accumulation phase and so once we had another dig below this low this is another smt Divergence and you can look at it as another turtle soup right here and finally I sold my full position at this High and this was the clearest draw liquidity for me personally um as this was the 5 minute chart right and I'm executing on the 15-second chart so this was more than enough for me and obviously you can always catch more points right last but not least I wanted to show you guys an extremely high probability setup that is my favorite to trade and so this is when a higher timef frame Market maker model has lower time frame Market maker models within it and the previous example once again um is pretty much the same thing as this but because this trade specifically was so much cleaner I decide to make a little category for it so here is the higher time frame Market maker model and once again in this example is an hourly Market maker buy model framed from a daily inefficiency so here is where a consolidation we have our distribution phase here confirming it with smt Divergence then here we have our smart money reversal confirming it with smt Divergence right then here we have our accumulation phase right here which when I dive lower you'll see that it's confirmed with smt Divergence and why I was able to enter this trade and so I entered my trade within this Wick right here and on the hourly chart it looks like I caught a wick entry but as I dive deeper into the time frames it you'll realize quickly that this is just you know it's fractal price right so down here was actually a 2022 ICT model entry on the 15 second and we'll dive right into it once again higher time frame PD smt Divergence within it and then we're looking for lower time frame structure so what's our lower time frame structure in this case it would be the hourly Market maker buy model and then lastly is just trade management right in this case I'm not trading the hourly chart I'm just using it as once again higher time frame context and that's why High time frame context is extremely important so here is the accumulation phase zoomed in on the 5minute chart as it is the lower time frame relative to the hourly chart right so here once again this is the accumulation phase and I'm going to remove the accumulation box and cleaning up the annotations we can see that all three things I look for in my model is met so one we're looking for higher time frame PD array two smt Divergence three lower time frame structure and in this case the higher time frame PD would be that hourly fair value Gap and within this fair value Gap there was SM smt Divergence on the lows as well this smt Divergence occurred with ym and lastly as price is fractal this was also another Market maker buy model on a smaller time frame so even on the 5 minute here you can already see there's your original consolidation up here your distribution phase right here smart running reversals down here with that SM uh smart money reversal right smt Divergence and then we have our accumulation phase right here re accumulation right here and then that final run to that original consolidation right unfortunately the replay feature doesn't allow me to go to the 15-second chart for my entry but essentially what I used to confirm the entry was a 15-second 2022 ICT model as I mentioned a little earlier in this slide you are looking at the one minute chart and so once again you're looking at a market maker buy model right so it's a market maker buy model within a market maker buy model so here we have our origin consolidation with the smt on the highs Distribution smt on the highs SM money reversal smt on the lows over here within a higher time frame PD which would be that 5 minute Fair rally Gap and then here accumulation phase one smt on the Lowes reaccumulation and then this final smt right here tells me that we're ready to expand and so once again pay attention to these um pay attention to these uh smt divergences once we have this smt on the highs expansion right SM smt on the highs expansion lower this case I guess it would be um an exception as it did chop around a little bit before it happened but generally it does happen so here's smart money reversal S&T what happens expansion smt Divergence on these lows what happens expansion right and then finally here S&T Divergence what do we get expansion to that original consolidation high and so I entered within this area right here if we zoom in a little bit um I can't really zoom in here but you can see this up Clos candle right here on the 15-second chart it creates that fair value Gap Market structure shift whatever you want to call it and it was that 2022 model entry and that's why on the higher time frame such as the 5 minute or the 1 hour chart it looks like I entered within the wick yes I entered on the wick of the 5minute candle and the hourly candle but on the 15-second candle I had plenty of confirmation before entering so whenever you see me executing on those seconds charts it's I really did my homework from monthly chart daily chart to hourly chart to 5 minute chart to 15sec chart right you need all that context to make it valid otherwise you're just going to be chopping yourself up on the 15-second chart or 5-second chart all day and so that brings me to the conclusion of the lecture covering smt Divergence I hope you all found this insightful and once again if you have any questions feel free to ask me in the Discord as I don't really respond to questions in the comments because it's a little harder for me to do that another thing I would like to ask of you guys is to subscribe for any upcoming content and as always have a great day

welcome back to another lecture as always if you have any questions then feel free to ask me at the end of the presentation for those that are asking me on YouTube feel free to join my free community on Discord and ask me questions there as I can easily answer your questions whereas in the YouTube comments I can&#39;t really post any screenshots examples stuff like that in this lecture I will be covering smt Divergence and why it is extremely important to my model and in my opinion to any ICT strategy if there was one concept from ICT that I would label theote Holy Grail it would be smt Divergence so what is smt Divergence smt Divergence is the acronym for smart money tool so the long form of smt Divergence is smart money tool Divergence you may hear others say that smt Divergence is a cracken correlation and essentially what this means is that smt Divergence is a price signature that occurs when correlated markets don&#39;t move in tandem with one another this is significant because it tells us that there is some sort of institutional sponsorship going on in the markets and so before I dive any deeper into smt Divergence the prerequisite to spot smt Divergence is to understand basic Market structure so if you don&#39;t know much about Market structure make sure that you learn that first so for example higher highs higher lows lower lows and lower highs when using smt Divergence in the right context you will be able to find trade ideas that immediately run in your favor and so this is the main reason I love smt Divergence and why it is such a crucial component of my model smt is how I find turtle soup setups and in my opinion smt is Turtle soups in my opinion I&#39;m not 100% sure if this is correct but from my screen time and experience it has proven to be true when looking at correlated markets they should move in tandem meaning that when one market makes a new swing point so should the other in this diagram there is no smt Divergence because the markets are moving in sync when Market a on the left makes a higher high or a lower low Market B on the right also makes a higher high or a lower low so here&#39;s that example of no smt Divergence right where correlated Market a is making a higher high which means Market B should also be making a higher high therefore in this diagram there is no smt Divergence vice versa when correlated Market a makes a lower low correlated Market B should also make a lower low so in this case there is no smt Divergence because they both are doing what they&#39;re supposed to do in this slide I have created a diagram to show what smt Divergence looks like in the markets so compared to the diagram in the previous slide we can see that market a a on the left makes a higher high or lower low whereas Market B on the right fails to create a new higher high or lower low when this occurs this is smt Divergence and is a price signature that indicates some sort of manipulation is occurring so here on the left once again you have correlated Market a making a lower low so we&#39;re expecting correlated Market B to also make a lower low but in this case it makes a higher low right low High lower low low high higher low right so that cracking correlation is what we call smt Divergence and vice versa here we have corer Market a making a new higher high which means Market B should be making a new higher high as well but in this case it fails to make a higher high it makes a lower high right so this would be smt Divergence when you get smt Divergence on the lows this is a bullish signature so we&#39;re looking for bullish price action after this occurs whereas if you get smt on the highs you are looking for bearish Price action as that is a bearish signature as I mainly trade index Futures I only know a few correlated assets so for index features I refer to NQ es and ym XY is also applicable but I would look at it for longer term correlations another use case for dxy that I use personally is if NQ es and ym are not providing immediate feedback I will refer to the dollar Index as well for Forex I only analyze EU so the correlated assets are EU gu and dxy for crypto it would be Bitcoin and ethereum one thing to note is that dxy is inversely correlated so that means the chart is qu upside down in relation to most assets so here&#39;s an example where let&#39;s say this chart on the left is EU or NQ and this chart on the right is dxy so here when EU or NQ makes a higher high on dxy since it&#39;s inversely correlated meaning it&#39;s upside down we&#39;re looking at the lows when we&#39;re looking at the highs on EU so let me reiterate that on EU or NQ for example if we&#39;re looking at the highs then on dxy we&#39;re looking at the lows as they are inversely correlated so now getting a bit more in depth of why smt Divergence is so important surrounds the idea that it is the first sign of institutional sponsorship in the markets as trading alongside smart money is the whole premise to ICT and so with that logic in mind you will find that smt Divergence occurs at the beginning and end of every Trend yes I just said that let me repeat it you will find that SM T Divergence occurs at the beginning and end of every Trend so I hope you are able to grasp how significant that is because I basically told you that this concept will spot reversal for you when applied in the right context this means that smt Divergence will help you find the high or low of x x being a variable that represents any defined range in time so for example X could be the year the month the week the day the session so because smt Divergence is able to help you spot reversals of the market it can also help you spot the high or low of defined ranges in time another use case of smt is that it indicates when accumulation or distribution phases are complete in Market maker models so for those that are having trouble spotting specific phases of a market maker model you can use smt Divergence to gauge when a phase has been completed and so not only does smt indicate the high or low of a defined range in time but it also indicates that the market is ready to expand now that you understand what smt is this is how I personally like to apply it the first thing is to use smt divergences to spot phases of Market maker models and Within These phases is where my model resides when looking for smt Divergence I am always looking for them to occur within a higher time frame key level this is also where I&#39;ve seen the occurrence of stacked smt Divergence which I haven&#39;t heard anyone else talk about so in a future lecture I&#39;ll cover this here is a diagram of what I mean when using smt in Confluence of Market maker models most Educators usually teach to look for smt only at the Smart money reversal but when using smt it can also be applied to different phases of the market maker model by studying this and understanding this you will be able to identify why explosive price movements occur and so here I want to explain correlated Market a correlated Market B so here we have a market maker model right Market maker buy model so at every phase in the market you will find smt Divergence so let&#39;s say you have the origin consolidation this would have been the previous Market maker sell model right it would have been that previous Market maker sell model smart money reversal it turns into original consolidation so here to identify our first distribution phase we find that smt Divergence and most likely you will have expansion in the market after that occurs once that occurs you&#39;re looking for your smart money reversal smt Divergence once again right so Market a making lower low Market B fails to make that lower low same thing over here with the other phases smt Divergence on the highs for the distribution phase where Market a makes a higher high Market B fails to make the higher high right and then in the original consolidation Market B makes a higher high Market a fails to make the higher high that&#39;ll be smt Divergence and so finally we have the accumulation phase where in Market a makes a lower low taking out that liquidity and then Market B it fails to take out that low and so a lot of times people that are only fixated on one market let&#39;s say this is es right here on the right side and it&#39;s NQ on the left side well when people are looking for a liquidity sweep on ES and they don&#39;t get it it&#39;s because smt has occurred within the markets and then we have the exact same thing here but in a market major sell model format so I just flipped around the charts um this distribution I usually look at it as accumulation so I accidentally didn&#39;t swap these but be original consolidation accumulation where the distribution is uh just swap that with accumulation smart Runner reversal up here and then we have distribution so just swap around the distribution accumulation phases and so with each phase you&#39;ll be able to identify with that smt Divergence on the highs for bearish Price action right and then on the lows for bullish price action so removing some of the lipstick of the market maker model and adding the higher time frame key levels this right here is exactly what I look for in all my trades so I&#39;ll be usually looking at a higher time frame Market maker model and so we look for that higher time frame key level so let&#39;s say this is an hourly Market maker buy model and whenever we look for smt Divergence we&#39;re looking for it to occur within a higher time frame PD array so in this case it would be an hourly PD array and I would drop down to the 5 minute look for that smt Divergence look for lower prices if that makes sense and then we have the same thing once again vice versa so this is a m uh Market maker cell model and so when I&#39;m looking for um cells on the right side of the curve I&#39;m looking for that hourly Fair Valley gap smt on the highs within that high time frame Fair Valley Gap or whatever PDR you want to use and then look for cells going lower into the original consolidation and so this setup right here is the Silver Bullet setup that ICT love so much same thing over here on the left side of the curve this would have been a market maker buy model model right before we turn into a market maker sell model and so this right here this would be that Silver Bullet setup for a market maker Buy Long setup right so that would be this right here now that you understand what smt Divergence is I&#39;m going to be showing some trades I took based on smt Divergence as this concept is a crucial part of my model in these first examples they are just simply using smt Divergence and Market maker models together to trade and once again my model is just higher time frame PD smt Divergence within it and then I look for lower time frame structure and number four would just be that trade Management in this first example we can see a market maker buy model and this was annotated live with the Discord so make sure you check that out if you want to join so getting into the example we can see how smt Divergence helps identify the phases of a market maker model a great way to use smt Divergence as well is not only entries but also for trailing stop losses and so here I just want to explain we have identifi the original consolidation the distribution phase with smt right so smt on the highs here but smt on the highs here and then we had smt on the lows here smt on the lows here smt on the lows here and so I took a long from down here and so to Trail my stop loss every time I see an smt Divergence this is a very general way that you can do it as well that is very effective in my experience um how I tra Trail my stop loss is a little more advanced as I use every PD array to kind of Trail and follow orderflow but smt Divergence is a great way to Trail your stop loss so every time I see some sort of accumulation phase um in this market maker buy model for example if there&#39;s smt Divergence then I&#39;m not afraid to put my stop loss at this low right here right this low because I know that this low should not be taken out since there&#39;s smt Divergence that occurred here and so once again waiting for price to do whatever it&#39;s doing trades below this low creates that smt Divergence you can Trail your stop loss to this low now right and then Target that final original consolidation so here&#39;s the second example and it&#39;s exactly the same thing but now it&#39;s a market maker sell model right so we have this original consolidation here with smt Divergence confirming that the previous Market maker buy model had had been um that was the smart money reversal for it and so once we create this new smart money reversal this became original consolidation so here we can see there&#39;s a lot of equal lows here perfect for draw liquidity and we had this retracement accumulation right here smt Divergence telling me that this accumulation phase has completed and so once we have this smt Divergence we&#39;re looking for higher prices right and so on these highs we have smt diver Ence as well and so that was indicating to me that we were about to have our smart money reversal and right here we have that smart reversal trade lower get that market structure shifted you&#39;re trading that 2022 model right and so right here we trade back into this Fair valy Gap and something I want to mention is you can have smt Divergence with fair value gaps as well that&#39;s also another thing I don&#39;t really hear people talking about but I&#39;ll just put it out there that this is something I see all the time where one market will trade back into a fair value Gap the other Market will leave it as a breakaway Gap and then that&#39;s smt Divergence in my head and the reason I would say it&#39;s smt Divergence is because if you drop down to a lower time frame for example as price is fractal this fair value Gap um low would be a swing high on a lower time frame and so right here we have that smt Divergence distribution this is where I entered the market right here on this uh it&#39;s a balanced price range right here but I&#39;ll just call it a fair value Gap and so we drop lower and then ultimately into that original console audition right and last but not least here is the third example and once again exact same thing right um this one I actually had the executions on chart because my previous annotations those ones I executed on ninja Trader so I don&#39;t have the annotations for that but you still get the same idea and honestly I I would say this is the cleanest example I have of using smt with Market maker models and so this was a trade I took on the 15 second if I remember correctly and so here we have right once again original consolidation we had smt prior to this we have Distribution smt on the highs right here right and then after we had redistribution another smt on the highs help me confirm that and so right here smart money reversal we had an S&amp;T on the the lows I forgot to I guess I forgot to annotate it here um smt on the lows and on top of that this occurred right at 9:00 a.m. um if you study quarterly Theory you&#39;ll understand the significance of that but for now I&#39;m just going to leave that as it is because I&#39;m only talking about smt Divergence in this lecture and so once we have that smart money reversal looking for our first accumulation phase and so once we had this smt Divergence on the lows that&#39;s when I pulled the trigger and I was targeting that first redistribution high and so once we took that out I partialed 50% here get some sort of retracement trading higher right and then once we take that second distribution High partial to another 25% right there right and then right here we have another smt Divergence and then from this point on once we have smt Divergence I&#39;m expecting these lows not to be taking anymore and that&#39;s why whenever I enter my trades if it if I am correct cor then you will see that my trades quickly go in my favor the reason is because I&#39;m using smt Divergence to identify which low is the manipulation low and so right here the second reaccumulation right here smt Divergence you can Trail your stop- loss up to this low for example and we should see expansion higher which we never revisit this low right so we see expansion higher finally tapping into that original consolidation and the first tap I didn&#39;t really take profit but the second one I was like like all right it&#39;s looking a little suspicious so I just closed and I didn&#39;t actually close at the original consolidation High I think I closed somewhere in this area right here once it tapped into it traded lower because we didn&#39;t get any sort of displacement past that point moving on to the next example I wanted to show you guys how I frame my trades based on a higher time frame Market maker model and if you&#39;ve watched my previous video on my model then you would understand that this is exact ex actly what I look for in my majority of my trades the only difference between this and that video is that I am implementing smt Divergence to it confirmed the market is ready to expand this is why by understanding my model extremely well I know that if my entry is valid it will go quickly in my favor so in this example it is an hourly Market maker buy model framed from a daily inefficiency here right Market maker buy model we had smt prior to this creating that original consolidation or you could say it&#39;s a smart money reversal for the market maker sell model that was occurring on the left side of the curve here right we have our original consolidation distribution phase smt on the highs right confirming that we&#39;re ready to go and you can notice every time I annotate smt Within These phases you see expansion right away once again here redistribution smt on the highs expansion right away so down here we finally got that smart money reversal right smt on the lows and so we started to what displace higher so the second we have smt Divergence we expand in the market so this fair value Gap is where I was looking for and operating within and so this right here was um I&#39;d say these setups are generally what I call A+ setups and then um in the next segment of examples I will show you guys a ++++ setup for my model specifically so dropping down down to the 5 minute this is the price action we were looking at so this yellow box was that hourly Fair Valley Gap and then that blue box was the accumulation phase and so in this slide I have removed the higher time frame annotations and made it a little cleaner and this is the screenshot of exactly what my model is right so here I wanted to mainly highlight the smt Divergence that occurs at the lows here and so this is where I took my first buy since this was a smt Divergence I&#39;m looking for within a higher time frame PD array right and remember this is all higher time frame context that makes this possible on the lower time frame is that you need that higher time frame context I understand we&#39;re in a market maker buy model on the higher time frame right to go higher and so this is also where I want to kind of show you guys why smt Divergence I view it as turtle soup and so here I&#39;m expecting accumulation right this is just a generic accumulation manipulation distribution right you can also look at this as a market maker buy model on a smaller scale but here I&#39;m just going to say it&#39;s accumulation manipulation distribution as it&#39;s not the cleanest Market maker buy model here and so here once we had that smt Divergence on the lows with this hourly Fair Valley Gap right and that was turtle soup I went onto the 15-second chart from the 5 minute chart and I looked for my entry right here once I got my entry in here I was just managing my trade right once you have that smt and once again this is why by understanding my model if my entry is correct I should see expansion in my favor right away right so smt expansion right away and then once we dig lower into here I&#39;m looking at this as some sort of accumulation phase and so once we had another dig below this low this is another smt Divergence and you can look at it as another turtle soup right here and finally I sold my full position at this High and this was the clearest draw liquidity for me personally um as this was the 5 minute chart right and I&#39;m executing on the 15-second chart so this was more than enough for me and obviously you can always catch more points right last but not least I wanted to show you guys an extremely high probability setup that is my favorite to trade and so this is when a higher timef frame Market maker model has lower time frame Market maker models within it and the previous example once again um is pretty much the same thing as this but because this trade specifically was so much cleaner I decide to make a little category for it so here is the higher time frame Market maker model and once again in this example is an hourly Market maker buy model framed from a daily inefficiency so here is where a consolidation we have our distribution phase here confirming it with smt Divergence then here we have our smart money reversal confirming it with smt Divergence right then here we have our accumulation phase right here which when I dive lower you&#39;ll see that it&#39;s confirmed with smt Divergence and why I was able to enter this trade and so I entered my trade within this Wick right here and on the hourly chart it looks like I caught a wick entry but as I dive deeper into the time frames it you&#39;ll realize quickly that this is just you know it&#39;s fractal price right so down here was actually a 2022 ICT model entry on the 15 second and we&#39;ll dive right into it once again higher time frame PD smt Divergence within it and then we&#39;re looking for lower time frame structure so what&#39;s our lower time frame structure in this case it would be the hourly Market maker buy model and then lastly is just trade management right in this case I&#39;m not trading the hourly chart I&#39;m just using it as once again higher time frame context and that&#39;s why High time frame context is extremely important so here is the accumulation phase zoomed in on the 5minute chart as it is the lower time frame relative to the hourly chart right so here once again this is the accumulation phase and I&#39;m going to remove the accumulation box and cleaning up the annotations we can see that all three things I look for in my model is met so one we&#39;re looking for higher time frame PD array two smt Divergence three lower time frame structure and in this case the higher time frame PD would be that hourly fair value Gap and within this fair value Gap there was SM smt Divergence on the lows as well this smt Divergence occurred with ym and lastly as price is fractal this was also another Market maker buy model on a smaller time frame so even on the 5 minute here you can already see there&#39;s your original consolidation up here your distribution phase right here smart running reversals down here with that SM uh smart money reversal right smt Divergence and then we have our accumulation phase right here re accumulation right here and then that final run to that original consolidation right unfortunately the replay feature doesn&#39;t allow me to go to the 15-second chart for my entry but essentially what I used to confirm the entry was a 15-second 2022 ICT model as I mentioned a little earlier in this slide you are looking at the one minute chart and so once again you&#39;re looking at a market maker buy model right so it&#39;s a market maker buy model within a market maker buy model so here we have our origin consolidation with the smt on the highs Distribution smt on the highs SM money reversal smt on the lows over here within a higher time frame PD which would be that 5 minute Fair rally Gap and then here accumulation phase one smt on the Lowes reaccumulation and then this final smt right here tells me that we&#39;re ready to expand and so once again pay attention to these um pay attention to these uh smt divergences once we have this smt on the highs expansion right SM smt on the highs expansion lower this case I guess it would be um an exception as it did chop around a little bit before it happened but generally it does happen so here&#39;s smart money reversal S&amp;T what happens expansion smt Divergence on these lows what happens expansion right and then finally here S&amp;T Divergence what do we get expansion to that original consolidation high and so I entered within this area right here if we zoom in a little bit um I can&#39;t really zoom in here but you can see this up Clos candle right here on the 15-second chart it creates that fair value Gap Market structure shift whatever you want to call it and it was that 2022 model entry and that&#39;s why on the higher time frame such as the 5 minute or the 1 hour chart it looks like I entered within the wick yes I entered on the wick of the 5minute candle and the hourly candle but on the 15-second candle I had plenty of confirmation before entering so whenever you see me executing on those seconds charts it&#39;s I really did my homework from monthly chart daily chart to hourly chart to 5 minute chart to 15sec chart right you need all that context to make it valid otherwise you&#39;re just going to be chopping yourself up on the 15-second chart or 5-second chart all day and so that brings me to the conclusion of the lecture covering smt Divergence I hope you all found this insightful and once again if you have any questions feel free to ask me in the Discord as I don&#39;t really respond to questions in the comments because it&#39;s a little harder for me to do that another thing I would like to ask of you guys is to subscribe for any upcoming content and as always have a great day

Transcript for:SMT Divergence

Transcript for:
SMT Divergence