Every term we use in class, defined the way we actually teach and code it — including the 2 CR method vocabulary (LSM, LRM, TJL, ISS/5WC, Dual CHoCH, QML A+) that you will not find defined anywhere else. Written by Mahesh Zambare Patil.
76 terms
The structure–liquidity–zones framework. These are the terms every other module builds on. Taught in this course →
A way of reading price charts that asks where the largest participants — banks, funds, prop desks — have to transact. It infers their behaviour from three things: market structure, liquidity and the zones (order blocks, fair value gaps) their execution leaves behind. It is a framework for reading charts, not a guaranteed system.
The sequence of swing highs and swing lows. An uptrend prints higher highs (HH) and higher lows (HL); a downtrend prints lower highs (LH) and lower lows (LL). Structure tells you which side of the market you should even be looking to trade.
A local extreme in price — a high with lower highs either side, or a low with higher lows either side. In SMC a swing only counts once it has been confirmed (by a structure break, an inducement sweep, or — in the 2 CR method — a two-candle retracement).
An impulse is a strong, directional leg; a pullback is the corrective move against it. Marking structure correctly starts with recognising which legs are impulsive and which are merely pullbacks — the first lecture of our SMC module.
A candle body closing beyond a confirmed swing in the direction of the trend — continuation. Wicks do not count; the break is judged on the close.
A candle body closing beyond a confirmed swing against the trend — the first sign that the trend may be reversing. A CHoCH is a warning, not an entry by itself.
A small pocket of liquidity — a minor high or low — resting just in front of a genuine swing point. Price typically sweeps the inducement to collect those orders before the real move from the zone. A swing is only trusted once its inducement has been taken.
Resting orders: stop-losses above obvious highs and below obvious lows, breakout orders beyond ranges, orders at round numbers and session extremes. Large players can only fill large orders where liquidity sits, so price is drawn to these pools.
Price trading through an obvious level, filling the orders resting there, and then reversing. The test: a sweep is a wick through the level with a close back inside; a genuine breakout closes beyond it.
Two or more highs (or lows) at nearly the same price. They look like strong support or resistance to retail traders, which is exactly why stop-loss liquidity stacks up behind them.
The highs and lows of the Asian, London and New York sessions. The Asian range in particular is a pool that London tends to sweep before the day's real move.
The last opposing candle before an impulsive move — for example, the last bearish candle before a strong rally. It marks where an institution may have accumulated a position, and price often reacts when it returns there.
Price returning to an order block or zone so that the positions opened there can be closed or added to. A zone that has been mitigated has usually done its job; a fresh, unmitigated zone carries more weight.
A three-candle pattern where the wick of candle 1 and the wick of candle 3 do not overlap, leaving a gap in the middle candle's range. It forms when price moves too fast for both sides to trade fairly, and price often returns to fill it.
SM Trading Zone's refinement for cleaner gaps: an inside bar (a candle fully within the previous candle's range) is not counted as candle 1, 2 or 3 of the FVG pattern, because it adds no new range information. Fewer zones, better zones.
A fast, decisive move — usually a run of large-bodied candles that leaves a fair value gap behind. Displacement is the evidence that a structure break or sweep had real participation behind it.
Split the current dealing range at 50% (equilibrium). Above it is premium (expensive), below it is discount (cheap). Look for buys in discount and sells in premium — it disqualifies bad zones rather than creating trades.
The swing low to swing high that price is currently working inside. Premium/discount, targets and the quality of a zone are all judged relative to the dealing range.
A zone where you plan to do business — typically an order block or fair value gap in the right part of the dealing range, with structure behind it. A POI is a location to wait at, not a signal to act on.
The direction institutions are transacting in, read from structure and how price behaves at zones. In an uptrend, order flow is bullish: demand zones hold, supply zones fail.
Reading the higher timeframe for bias and zones, then dropping to a lower timeframe for confirmation and entry. Trading with the higher-timeframe flow removes most of the low-quality setups.
A defined sequence of events that qualifies an entry once price reaches a zone — for example CHoCH → pullback → tap of the order block. Our SMC module teaches several, including CHoCH without inducement and the flip entry.
A zone that changes role after being broken — support becoming resistance or the reverse. Entering on the retest of a flip is one of the entry models taught in the SMC module (see also SBR / RBS in the 2 CR method).
An order block that failed — price traded through it — and now acts in the opposite role. Breakers are taught in lecture 25 of the current batch.
A zone built from the wicks at a swing high or low, where price was sharply rejected. Used as a refined area of interest inside a larger zone (lecture 28).
Time-and-price vocabulary from the Inner Circle Trader body of work, as taught in our ICT module. SM Trading Zone is not affiliated with ICT. Taught in this course →
The body of trading concepts popularised by Michael J. Huddleston: time and price, killzones, named delivery models. SM Trading Zone teaches these concepts in Marathi and Hindi on top of its SMC module and is not affiliated with ICT.
A time window in which institutional delivery clusters — chiefly the London and New York sessions' opening hours. The same setup inside a killzone carries more weight than the same setup at 3 AM.
The three phases of a session or candle: Accumulation (range-building), Manipulation (a sharp move against the true direction that raids stops) and Distribution (the genuine expansion). The wick is the receipt of manipulation.
A fair value gap that price closed through and which now acts in the opposite role — a failed bullish gap becomes resistance, a failed bearish gap becomes support. Taught in lecture 24.
The overlap of a bullish fair value gap and a bearish fair value gap. Both sides have been 'balanced', and the overlap often acts as a strong reaction zone.
The 62%–79% retracement of an impulse leg, measured with a Fibonacci tool. Used to refine an entry inside a zone rather than as a standalone signal.
A time-based model: a fair value gap entry taken inside a specific one-hour window (for example 10–11 AM New York), in the direction of the draw on liquidity.
When two correlated instruments disagree at a sweep — one makes a new low, the other refuses — the correlation has cracked and the sweep is more likely manipulation than trend. Compared pairs: EURUSD vs GBPUSD, NQ vs ES, gold vs silver.
The liquidity pool price is most likely being delivered towards — the previous day's high, a session extreme, equal highs. Bias is built by asking which pool is the draw.
A displacement break of a recent swing that signals a reversal — the ICT/CRT counterpart of a CHoCH, with the added requirement of real displacement behind it.
A breaker block that overlaps a fair value gap — two footprints in one place. Lecture 26 in the current batch.
Trading the failed breakout: price runs beyond an obvious prior high or low, fails to continue, and snaps back. Amateurs trade the breakout; the Turtle Soup trades its failure. Lecture 27.
A false move early in a session designed to trap traders on the wrong side before the true direction is revealed — manipulation, in Power of Three terms.
ICT's term for the idea that price is delivered by an algorithm that systematically seeks liquidity and rebalances inefficiencies rather than moving randomly. In practice it is studied through the 20-, 40- and 60-day lookback ranges (the 'IPDA data ranges'), whose highs and lows mark the levels price is most likely to seek next.
A shift in how price is being delivered, confirmed when a candle closes through the opening price of the last run of opposite-coloured candles that led into a high or low. It is ICT's finer-grained reversal confirmation — earlier than a swing-based market structure shift — and is taught alongside MSS in our ICT module.
The exact 50% level of a fair value gap (or of a wick). ICT treats it as the precise point inside a gap where price is most likely to react, so entries and stops are often refined to it.
New Week Opening Gap and New Day Opening Gap — the price gap between Friday's close and Sunday's open (NWOG), or between one day's close and the next day's open (NDOG). Both are treated as reference levels that price tends to revisit and rebalance.
Every candle is a range. The terms of the 3-candle model, its validity rule and its timing. Taught in this course →
Every candle is a range. When price sweeps one side of a higher-timeframe candle's range and closes back inside, it tends to deliver to the other side. CRT is the discipline of marking that range, waiting for the sweep, demanding the close back inside and trading the delivery.
The high and low of the anchor (reference) candle — candle 1 of the 3-candle model. Strongest when that candle closes at a higher-timeframe key level.
Candle 2 of the model: its wick raids one side of the CRT range while its body closes back inside. This is the trap being set.
The sweep candle must close back inside the range. Wick raid plus close inside = manipulation, trade it. Body close beyond the range = genuine breakout, do not fade it. This single filter removes most losing CRT setups.
Candle 3 of the model: the expansion to the opposite side of the range — the trade itself. TP1 is usually the opposite range extreme.
The 1 AM, 5 AM, 9 AM and 1 PM New York 4-hour candle opens — the anchor candles most often used for intraday CRT setups. Converted to IST in class (the offset shifts by an hour with US daylight saving).
CRT is anchored to a higher timeframe and refined on a lower one: 4H anchor → 15m structure → 5m entry is the classic intraday pairing; Daily → 1H → 15m for swings; 1H → 5m → 1m for killzone scalps.
After the higher-timeframe sweep, drop down and require: a lower-timeframe sweep, a market structure shift with displacement, then a retest of the displacement FVG or order block for entry. It turns a 1.5R idea into a 3–5R trade.
The checklist that grades a CRT setup: higher-timeframe key level, liquidity reference (PDH/PDL, session highs/lows, equal highs/lows), killzone timing, SMT divergence, higher-timeframe bias, displacement quality. More boxes ticked, more size — fewer boxes, smaller or no trade.
If a CRT trade is stopped out and price closes outside the range, the setup is dead. No re-entry until a new anchor candle forms.
The previous day's high and low — the most common external liquidity references for CRT targets (TP2) and for grading a sweep.
Two-Candle Retracement structure marking — SM Trading Zone's mechanical structure method. Several of these terms exist nowhere else, so they are defined here in full. Taught in this course →
Two consecutive opposite-colour candles where the second closes beyond the first's low (in a bullish leg) or high (in a bearish leg). That single event confirms the swing point behind it. It replaces eyeballed swings and fractal pivots with a rule that gives every student the same structure. Not to be confused with 'two-candle rejection' patterns used elsewhere.
A swing high or low that has been confirmed by a 2 CR. Confirm Highs are marked with a blue dot and Confirm Lows with a black dot in the method's chart marking.
A break of a confirmed level that is not validated by the next candle — the following candle closes straight back through it. The break is labelled fake and the same level stays active. This is why labels appear one candle after the break.
The protected low in a bullish trend: the lowest point between the Confirm High and the candle that broke it, stamped at the moment a BOS is confirmed. A validated close below the LSM is the CHoCH that flips the trend.
The bearish mirror of the LSM: the protected high stamped at a confirmed bearish BOS. A validated close above the LRM flips the trend bullish.
In the 2 CR method a CHoCH needs two consecutive candles closing beyond the LSM (or LRM). Candle colours are irrelevant; a close exactly at the level does not count.
Five internal waves against the external trend, forming inside the last impulse (between the recent Confirm High and the LSM). It is a pre-CHoCH warning, never a trend flip by itself, and works best on H1 and M15 when the impulse was unusually long. The wave-3 and wave-4 levels are the areas of interest.
Two with-trend zones drawn after every confirmed BOS: TJL1 at the broken Confirm High/Low (the flip zone) and TJL2 at the new LSM/LRM pivot. They are the places to join a trend instead of chasing it. A fake BOS draws nothing.
A CHoCH that ends a segment which itself began with a CHoCH and printed no confirmed BOS in between — a V-shaped trap reversal that usually resumes the original trend strongly. Taught for 1H, 4H and Daily; its TJL2 is graded A+.
Support-Become-Resistance and Resistance-Become-Support: the broken LSM (or LRM) pivot after a confirmed CHoCH, now acting in its new role. One of the A+ zones a CHoCH leaves behind (lecture 23).
The previous Confirm High (bearish case) or Confirm Low (bullish case) before the CHoCH — the level that was never retested. Graded A+ in the 2 CR method.
The final top (LRM) or bottom (LSM) pivot that a CHoCH breaks away from, kept as a zone for the retest.
The highest-quality zones in the 2 CR method — those with a confirmed structural reason behind them, such as the QML level, TJL2 after a Dual CHoCH, or the SBR/RBS flip after a validated CHoCH.
A one-candle alternative to the 2 CR on Daily (and optionally 4H): a single opposite-colour candle that closes beyond the previous trend candle's extreme. Never used below 4H.
The words that decide whether a method survives contact with a live account. Taught in this course →
Risking a fixed small percentage of the account — typically 0.5% to 1% — on every trade, so that a normal losing streak cannot end the account. The single most important number in trading.
A trade's result expressed in units of its initial risk. A trade that risked ₹1,000 and made ₹2,500 is +2.5R. Thinking in R makes results comparable across markets and position sizes.
The number of lots or units that makes the distance to your stop equal to your chosen risk. Calculate it before every trade — our free position-size calculator does the maths for gold, forex, crypto and Indian lots.
Where the trade is proven wrong. In CRT and SMC that is beyond the sweep wick plus a buffer — never exactly at the wick, which gets hunted by a second raid.
Moving the stop to the entry price after a partial target is reached, so the remaining position can no longer lose. Common practice after TP1 in the CRT playbook.
Testing a method on historical charts (backtest) and then in real time on a demo account (forward-test) before risking money. If a vendor tells you testing is unnecessary, walk away.
A record of every trade: setup grade, entry, exit, outcome in R, and the mistake if any. The only statistics that matter are the ones measured from your own journal.
An indicator that changes what it drew in the past — for example, a structure label that flips intrabar or a higher-timeframe value that peeks at an unfinished candle. Repainting tools produce beautiful history and useless live signals. SM Trading Zone's tools confirm on closed candles only.
Someone else's trade instructions. SM Trading Zone does not give them — on Indian securities never, and on international markets only as live educational practice. A method you own beats a call you rent.
Every term above is taught, marked and practised live in the Smart Money Mastery batch — in Marathi and Hindi, with every lecture recorded.
