Every core SMC term drawn, defined and reduced to the rule that actually decides whether it is on the chart or not — break of structure, change of character, order blocks, fair value gaps, liquidity sweeps and premium/discount.
Short answer
Smart Money Concepts is a way of reading price using market structure and liquidity rather than indicator values. A break of structure continues a trend, a change of character warns it may be turning, order blocks and fair value gaps mark where an impulsive move originated, and liquidity sweeps mark where resting stops were taken before a move.
BOS = body close beyond the last swing in the direction of the trend.
CHoCH = the first body close against the trend, through a protected swing.
Order block = the last opposing candle before a structure-breaking move.
FVG = a three-candle gap where wick one and wick three do not overlap.
Sweep = a wick through an obvious high or low that closes back inside.
The four diagrams
Screenshot these. Each one isolates a single concept with the level that defines it drawn in.
Break of structure vs change of character
Green break continues the uptrend. The pink circle is the first close below the protected low — the change of character.
Bullish order block
The last down candle before the impulsive move. The zone runs from that candle's open to its low.
Fair value gap
Candle one's high sits below candle three's low. The unfilled space between the dashed lines is the gap.
Liquidity sweep
Equal highs hold resting buy stops. The long wick takes them, then closes back inside the range.
Every term, with the rule
Select a term to see how to identify it, what invalidates it, and the mistake that makes it unreliable.
Break of Structure (BOS)
A close beyond the most recent swing point in the direction the market is already moving. It continues the existing trend rather than reversing it.
How to identify it
1.Mark the last confirmed swing high and swing low.
2.In an uptrend, wait for a candle body to close above the prior swing high.
3.In a downtrend, wait for a candle body to close below the prior swing low.
4.Re-mark structure after every break so the next reference point is current.
What invalidates it
A wick through the level that closes back inside is not a break of structure.
Most common mistake
Using wicks instead of closes, which produces a break on almost every volatile candle.
Smart Money Concepts terms and definitions
Term
Definition
Invalidated by
BOSBreak of Structure
A close beyond the most recent swing point in the direction the market is already moving. It continues the existing trend rather than reversing it.
A wick through the level that closes back inside is not a break of structure.
CHoCHChange of Character
The first break against the prevailing direction. In an uptrend it is a close below the last higher low; in a downtrend a close above the last lower high.
Price immediately reclaiming the level and continuing in the original direction.
OBOrder Block
The last opposing candle before an impulsive move that breaks structure. It marks the zone the move originated from.
A decisive close through the far side of the zone.
FVGFair Value Gap
A three-candle imbalance where the first candle's wick and the third candle's wick do not overlap, leaving unfilled space in the middle.
Price trading fully back through the gap closes it.
BSL / SSLLiquidity Pools
Clusters of resting stop orders. Buy-side liquidity sits above equal highs and swing highs; sell-side liquidity sits below equal lows and swing lows.
Once swept and closed beyond, the level is no longer a pool — it becomes structure.
SweepLiquidity Sweep
A push beyond a liquidity pool that is rejected and closes back inside the prior range, leaving a long wick.
A clean body close and continuation beyond the level — that is a break, not a sweep.
PDPremium & Discount
Split any leg in half with a range tool. Above the midpoint is premium, below it is discount. The midpoint itself is equilibrium.
A new high or low, which redraws the range entirely.
MBMitigation Block
A previously broken order block that price returns to after a change of character, used as a reference zone rather than a fresh origin.
A full close through the zone in the new direction.
The sequencing checklist
SMC is an order of events, not a collection of zones. Tick what is actually present on your chart — the order matters more than any single element.
Conditions present
0 / 6
Several conditions are missing. This is a checklist for describing a chart, not a signal to act on.
Choosing your timeframes
SMC uses at least two timeframes: one for direction, one for entry. Common pairings, with no claim that any is better than another.
This reference is free to quote, screenshot, teach from or republish in part, for any purpose including commercial, as long as you credit the source with a working link.
Citation
SimpleAlgo. (2026). Smart Money Concepts Cheat Sheet. Retrieved from https://simplealgo.io/smc-cheat-sheet
SimpleAlgo V5 marks break of structure, change of character, order blocks and fair value gaps on your TradingView chart as they form, so the sequence on this page is already drawn before you look at it. $24.95 per week or $300 per year, with a 7-day money-back guarantee.
A break of structure continues the existing direction — a close beyond the last swing in the way price is already going. A change of character is the first break against it, such as a close below the last higher low in an uptrend. BOS confirms trend, CHoCH warns that trend may be ending.
How do you identify an order block correctly?
Find a move that broke structure, then step back to the last opposing candle before that move began. Draw the zone from that candle's open to its extreme wick. If the move did not break structure, the candle is not an order block.
What counts as a fair value gap?
Three consecutive candles where the first candle's wick and the third candle's wick do not overlap. In a bullish gap, candle one's high sits below candle three's low. The unfilled space between them is the gap.
Is Smart Money Concepts the same as supply and demand?
They overlap heavily. Both mark zones where an imbalance between buyers and sellers produced an impulsive move. SMC adds a structural vocabulary — break of structure, change of character, liquidity sweeps — and a sequencing rule for when a zone is considered valid.
Can I use this cheat sheet on any market or timeframe?
The definitions are timeframe- and market-agnostic because they describe price geometry, not an instrument. The practical difference is noise: lower timeframes produce far more structural breaks, and most of them are insignificant.
Can I reuse this cheat sheet?
Yes. Quote it, screenshot it, embed it or teach from it freely, including commercially, as long as you credit SimpleAlgo with a working link.
Go deeper on each concept
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