10. The Smart Money Execution Playbook: A Step-by-Step Trade Walkthrough
Part of Chapter 06: Market Structure & Smart Money Price Action
- The 5-Step Smart Money Algorithm: Context -> Liquidity Sweep -> CHoCH -> Retest of FVG/OB -> Execution
- Targeting opposing Buy-Side or Sell-Side Liquidity for minimum 3:1 RRR
- Trade management: Moving stops to breakeven after the first internal BOS
Let us tie every concept together into a concrete institutional trade plan: Step 1 (Context): Identify that the 4-Hour chart is bullish, with a sequence of valid BOS structures.
Step 2 (Liquidity Raid): Price pulls back into Discount territory and sweeps Sell-Side Liquidity below a set of Equal Lows into an unmitigated 4H Bullish Order Block.
Step 3 (Lower Timeframe Shift): Drop down to the 15-minute chart and wait for a 15m Change of Character (CHoCH) with a full candle body close, leaving behind a 15m Fair Value Gap.
Step 4 (Execution): Set a limit buy order at the 50% midpoint of that 15m FVG, with the stop loss placed 5 pips below the sweep low.
Step 5 (Target): Set your take-profit target at the opposing 4H Buy-Side Liquidity resting above previous swing highs, capturing an asymmetric 3:1 to 5:1 Risk-to-Reward ratio.
Once price moves in your favor and prints a new 15m BOS, move your stop loss to break-even. Never let a trade that reached 2R become a losing trade.
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All Lessons in Chapter 06
Market Structure & Smart Money Price Action (10 Lessons)