Chart Part 5: SMC Basics - Structure, BOS, Order Blocks & Liquidity

Smart Money Concepts from zero: market structure, BOS vs CHoCH, order blocks, liquidity sweeps and FVGs.

By DigitalNepal · Updated 2026-10-04 · Verify current figures on official sources

Try it right here:

Chart school uses sample drawings - never real prices. Learn shapes here, practise on live charts without money, and read the risk guide before trading a single rupee.

Read any single day: who won, buyers or sellers.

Sample data for learning - not real prices. Hover any candle for O/H/L/C.

HammerBullish

After a fall, price drops hard inside the day but buyers push it back up near the open. Small body on top, long lower wick (2x body). Means sellers tried and failed.

Confirm first: Next candle closes above the hammer high, ideally with bigger volume.

SMC reads the market as footprints of large orders: structure shows who is in control, breaks (BOS) confirm continuation, and wicks past obvious levels (liquidity sweeps) show stops being hunted.

Work through the SMC group in the Chart School tool in order: Structure → BOS → CHoCH → Order Block → Liquidity → FVG → Premium/Discount. Each diagram builds on the last.

Steps

1Label structure first
Higher highs + higher lows = uptrend. Lower highs + lower lows = downtrend. If you cannot label it, you have no business trading it.
2BOS continues, CHoCH warns
Break of Structure with the trend = keep following. The first break against the trend (CHoCH) = stand aside until new structure forms.
3Find order blocks
The last opposite candle before a strong push. Mark the zone and wait for price to return to it - never chase the push itself.
4Respect liquidity
Equal highs/lows and obvious round numbers attract stop hunts. A wick through the level that closes back inside is the sweep footprint.
5Use FVGs as pullback targets
Gaps from impulsive candles often get filled on the return. Target them within the trend, not as reversal bets.
6Buy discount, sell premium
Top half of the swing = expensive, bottom half = cheap. Buying premium and selling discount is donating money.

Good to know: SMC has a huge hype problem: marketers sell it as a holy grail. It is a lens for reading price, not a guarantee. Risk rules still decide survival.

Information last verified: 2026-10-04. Prices, fees, rules and requirements change - confirm on the official website or office before acting. DigitalNepal.tech is independent and not affiliated with any provider or government body.