Smart Money Concepts Quiz: Test Your Knowledge

Question 1

At its core, what are smart money concepts (SMC) a way of doing?

Accepted Answer

Reading price action through the lens of large institutional order flow and their need for liquidity

Question 2

How do you recognise an uptrend from market structure?

Accepted Answer

Price prints higher highs and higher lows

Question 3

Which of these is the first warning that control may be shifting and the trend could be ending?

Accepted Answer

A change of character (CHoCH), where price breaks a swing point against the prevailing trend

Question 4

A four-hour chart shows an uptrend while the five-minute chart shows a downtrend inside a pullback. What does this tell you?

Accepted Answer

Both readings can be valid; they answer different questions, so decide which timeframe owns your bias

Question 5

Price spikes just above an obvious recent high, triggers stops, then immediately snaps back below it. What have you most likely seen?

Accepted Answer

A liquidity sweep, where resting stops were triggered to fill larger orders before the real move

Question 6

What is an order block in smart money concepts?

Accepted Answer

The last opposing candle before a strong impulsive move, where a large order is thought to have been absorbed

Question 7

What is the honest way to treat smart money concepts?

Accepted Answer

As a structured, discretionary way to read price, not a holy grail or guaranteed win rate