TRADESENSE.COM

  SMART MONEY CONCEPT (SMC) – CORE TERMS EXPLAINED 📌 What is SMC? Smart Money Concept (SMC) is a trading approach that focuses on how banks, institutions, and big players move the market. Instead of indicators, SMC studies price action, liquidity, and market structure . 1️. ORDER BLOCK (OB) 🔹 Simple Meaning: An Order Block is the last candle before a strong price move where big institutions placed large buy or sell orders . 🔹 Why it matters: Institutions cannot buy or sell everything at once. They place orders in zones. Price often returns to these zones before moving again. 🔹 Types: Bullish Order Block → Last down candle before a strong up move Bearish Order Block → Last up candle before a strong down move 🔹 How to identify: Look for a strong impulsive move Mark the last opposite-colored candle That candle = Order Block 🔹 How price reacts: Price returns to OB Institutions re-enter positions Strong...

  Elliott Wave Theory Elliott Wave Theory uses Fibonacci retracement (e.g., 38.2%, 50%, 61.8%) and extension levels (e.g., 161.8%) to predict price targets and correction depths within its 5-wave impulse and 3-wave corrective cycles. These ratios help define potential support/resistance zones for waves 2, 4, A, B, and C, and project extensions for waves 3 and 5.  Common Fibonacci levels in Elliott Wave (relative to prior waves) ·          Wave 2 (Retracement):  Often 50%, 61.8%, 78.6% of Wave 1. ·          Wave 3 (Extension):  Often 161.8% (or 261.8%) of Wave 1. ·          Wave 4 (Retracement):  Often shallower, e.g., 23.6%, 38.2%, or 50% of Wave 3. ·          Wave 5 (Extension/Equality):  Often targets 100% of Wave 1, or 61.8% of Wave 1+3 (or inverse 1.236-1.618 of Wave 4). · ...

  About Trading and Investing Trading and investing are two essential ways to grow wealth by participating in the financial markets. Trading involves buying and selling financial instruments such as stocks, commodities, currencies, or derivatives over short periods—hours, days, or weeks—to take advantage of price fluctuations. Traders focus on short-term gains , using strategies like technical analysis, charts, and market trends to make decisions. Investing , on the other hand, is the process of allocating money to assets such as stocks, bonds, mutual funds, or real estate with a long-term perspective . Investors aim to build wealth gradually , focusing on fundamentals like a company’s earnings, growth potential, and market position. How Trading and Investing Are Done Trading: Requires opening a trading account with a broker, analyzing market data, placing buy or sell orders, and monitoring positions continuously. Traders often use tools like charts, indicators, and news ...

  1. Earnings Per Share (EPS) Meaning: Profit earned per share. Shows how profitable each outstanding share is. M ore the EPS more better is the company. It should be in increasing trend in past few year , if it is decreasing, or same then there might be a problem or have very low growth with the company. Example: A company earns ₹100 crore and has 10 crore shares. EPS = 100 / 10 = ₹10 EPS TTM (12 months count) should be 80+. 2. Revenue Meaning: Total income from sales before expenses. Also called Top Line. Example: If a company sells products worth ₹5,000 crore → Revenue = ₹5,000 crore 3. Operating Profit (EBIT) Meaning: Profit earned from core business operations. S hould be in increasing trend with atleast double digit performance (more than 10%) year on year basis. Example: Revenue = ₹100 crore Operating expenses = ₹70 crore Operating profit = ₹30 crore 4. Reserves Meaning: Accumulated profits retained in the company over the yea...