One of the most frequent errors is marking every swing low/high as an order block. True institutional order blocks are characterized by strong displacement away from the level, often with high volume or a clear fair value gap left behind.
Mistake: Treating minor consolidation zones or weak reactions as order blocks.
Result: Price ignores the level, leading to repeated stop-outs.
Entering immediately when price reaches a fair value gap or the 0.618–0.705 OTE zone without confirmation is a classic trap. These zones are probabilities, not guarantees.
Mistake: Buying/selling the level without waiting for displacement, a change of character, or liquidity sweep confirmation.
Result: Price continues through the zone, trapping early entrants.
Analyzing concepts only on lower timeframes while neglecting the daily or weekly structure often leads to trading against the dominant trend.
Mistake: Taking a bullish setup on the 5-minute chart inside a strong weekly bearish order block.
Result: Short-term wins become long-term losses as higher timeframe pressure dominates.
Seeing liquidity sweeps everywhere — every equal high/low or stop cluster — leads to paralysis or forced trades.
Mistake: Expecting a reversal on every minor liquidity grab instead of focusing on high-probability sweeps aligned with structure and displacement.
Result: Missing real moves while waiting for fake ones, or entering low-quality setups.
Inducement (false breakouts, stop hunts) is powerful, but entering solely on a sweep without confirming the higher timeframe bias often traps traders on the wrong side.
Mistake: Shorting every upside liquidity sweep in a strong bull trend.
Result: Fighting the trend and accumulating losses during continuation moves.
Relying on a single concept (e.g., just an FVG or just an order block) without confluence from market structure, displacement, and liquidity often produces low-probability trades.
Best practice: Require multiple factors to align — e.g., FVG at an order block with a recent liquidity sweep and BOS in the direction of trade.
Adding too many rules, confluences, or "secret" indicators in an attempt to achieve perfection. SMC works best when kept simple and focused on high-probability structure.
Mistake: Requiring five or more confluences (FVG + OTE + order block + liquidity sweep + volume profile, etc.) before taking a trade.
Result: Paralysis by analysis — missing clear, valid setups while waiting for the "perfect" one that rarely appears.