Accumulation
- The phase where smart money quietly buys (accumulates) positions at favorable prices, often in ranges or after liquidity sweeps, before a markup phase.
Break of Structure (BOS)
- Price closing beyond a previous significant high (in uptrend) or low (in downtrend), confirming trend continuation.
Breaker Block
- General term for Order Block, Breaker Block, or Mitigation Block — zones where institutional orders are believed to reside.
Breaker Block
- Formed when price breaks and closes beyond a previous order block, invalidating it and flipping the zone into opposite polarity (support → resistance or vice versa).
Change of Character (CHOCH)
- The first break of market structure against the prevailing trend — early signal of potential reversal or trend change.
Demand Zone
- Bullish order block or area where buying pressure previously emerged. Price is expected to respect it as support on retest.
Displacement
- Strong, impulsive price movement (large candles, high volume) showing conviction. Required for valid BOS, FVG creation, and order block validation.
Distribution
- The phase where smart money sells (distributes) positions at premium prices, typically after markup, before a markdown.
Equal Highs / Equal Lows
- Two or more swing points at nearly the same price level — acts as strong liquidity pools that smart money targets for sweeps.
Fair Value Gap (FVG)
- A three-candle inefficiency where the high/low of the middle candle is not overlapped — creates imbalance that price tends to fill later.
Imbalance
- Same as Fair Value Gap — a price inefficiency left by aggressive buying/selling. Market seeks to "fill" it.
Inducement
- A false move designed to trigger retail stops or trap traders (e.g., fake breakout above resistance) before the real directional move.
Internal Range Liquidity (IRL)
- Liquidity resting inside the current range (stop runs of early entrants), often swept before expansion.
Liquidity
- Clusters of stop-loss orders, pending orders, or equal highs/lows that institutions target to enter/exit efficiently.
Liquidity Sweep
- Rapid price move that takes out buy-side or sell-side liquidity before reversing — often fuels the true trend.
Market Structure Shift (MSS)
- Another term for Change of Character (CHOCH) — the moment trend direction changes via structural break.
Markup / Markdown
- Markup = uptrend phase after accumulation. Markdown = downtrend phase after distribution.
Mitigation Block
- A smaller zone inside a larger order block where price has already partially reacted — acts as secondary support/resistance.
Optimal Trade Entry (OTE)
- Fibonacci retracement zone (typically 0.618–0.705 — inside an impulsive move, offering high-probability entry with institutional alignment.
Order Block (OB)
- The last opposing candle(s) before strong displacement — believed to contain unfilled institutional orders. Acts as future support (bullish OB) or resistance (bearish OB).
Order Flow
- The actual buying and selling activity in the market. SMC traders infer it through price action and liquidity behavior.
Premium / Discount
- Price above equilibrium = premium (expensive), below = discount (cheap). Smart money buys at discount, sells at premium.
Rejection Block
- A candle showing strong rejection (long wick) at a key level — often becomes a high-probability reversal zone.
Smart Money
- Institutional traders, hedge funds, banks — the "strong hands" who move markets with large capital.
Supply Zone
- Bearish order block or area where selling pressure previously emerged. Expected to act as resistance on retest.
Void
- Another term for Fair Value Gap — an area of low trading activity (inefficiency) that price wants to return to.
