If you are having trouble becoming a consistently profitable trader, then in this video, I will share with you my three-step SMC (Smart Money Concepts) trading strategy from start to finish. Let’s dive straight in to this easy-to-understand, three-step system.
The 3-Step SMC Trading Strategy for High-Probability Trades
Step 1: Impulse Phase
The first phase is impulse that assists to determine the directional bias of the market structure. To put it simply, this phase tells us where price is coming from and where it is heading.
Timeframe: We make use of the 15-minute timeframe for this phase.
What to Look For: We want to see bullish price action with a break of structure on the 15-minute chart. This break of structure indicates that we are in the impulse phase, as it marks the market’s movement from one price point to the next.
Step 2: Correction Phase
After every impulsive move, the correction usually begins. This pattern occurs on the lower time-frame, such as the 1-minute chart; we see here that the price is filling in lower lows, lower highs, and, of course, more lower lows as it draws back.
What to Watch For: The correction should be visible on the 1-minute chart. Once the impulse break of structure occurs on the 15-minute chart, we move down to the 1-minute chart to look for the correction phase.
Price Action: We are looking for the price to pull back to a zone of demand or key level once the initial impulse has finished.
Step 3: Second Impulse Phase
Once the correction is complete, we look for the second impulse phase, which will manifest on the larger 15-minute chart.
What to Look For: Price should shift from a bearish to bullish structure, confirming that the correction has ended and the market is moving in the direction of the initial impulse once more. The key is to trade with the 15-minute market structure and identify shifts that show price is likely to continue upward.
Live Example: London Session Trade
This will be an example trade taken on Thursday in the London session, looking from before that trade happened.
Start with a 15-minute Chart:
Using a 15-minute timeframe, we examine the overall flow of the market. Here it had just begun breaking structure off. This then entered the Impulse phase.
Identified Higher time frame area that was into supply so a reaction needed to form here
How do we see the Market structure
On the 15-minute chart, I have drawn out the market structure. The most significant swing highs and swing lows have been located.
After the impulse move, there was a change of character from bullish to bearish. Usually, when that happens, a reversal or big pullback may be close.
Lower Timeframe:
Here, on the 1-minute chart, we begin to see that bullish price action shifts to bearish, showing us that correction has begun.
The pullback did not fulfill the full criteria for a trade, but I watched closely.
Change in Market Structure:
Price eventually rolled back bullish following a break of structure on the 1-minute chart. This indicated that the market was getting ready to make another up move.
By this time, I was more than ready to enter the market as price showed a change from lower lows to higher highs.
Last Entry:
I waited for the price to pull back into the demand zone and confirmed the change of character before entering.
The target was the 15-minute high, which I expected to be tested as the market continued upward.
Final Thoughts
Trade Setup: The setup was a 1:5 risk-to-reward ratio, with my entry at the demand zone and a target at the 15-minute high.
Confirmation: Price action confirmed the bullish move, and I got in once it was confirmed. Once price touched my entry, I moved my stop to break even once the price has started moving upward.
Result: The trade went toward the target successfully, thus a profitable trade using the Impulse, Correction, and Impulse system.
This strategy is systematic and repeatable. By the rules, you can catch high-probability trades with low risk.
As for a more free in-depth course on market structure, check this link below in the bio.
All right. Thanks for the note. That is it for today! It’s the impulse, correction, impulse strategy that I rinse and repeat to catch profitable trades quite consistently.
