Why do retail investors always exit at the wrong times? The true manual of smart money operations

Question

Most retail traders' losses stem from the same mistake—following price fluctuations. Smart Money, on the other hand, does the exact opposite. These institutions, large funds, market makers? They are not following the market; they are leading its direction.## Definition and Operating Logic of Smart Money**What is SMC?** Simply put, Smart Money refers to institutional players who control large amounts of capital. Their trading approach is completely different from retail traders—they don't chase breakouts but set traps to harvest liquidity and then reverse their positions.Retail traders are usually caught in this process. When the price hits stop-loss levels, it's the moment when institutions are executing large trades.## The Three Main Steps of Smart Money Operations**Step 1: Harvest Liquidity**  Prices break support or resistance levels, reaching retail traders' stop-loss points. This is not the start of a trend but institutions clearing retail orders from the market.**Step 2: Signal of Structural Reversal (CHoCH)**  The structure shifts from bullish to bearish, or vice versa. This signal indicates that Smart Money has changed direction, and a new trend is about to unfold.**Step 3: Enter Order Blocks**  Institutions leave traces of large orders in specific zones. These areas are high-probability entry points—places where significant institutional trading has occurred before.## Practical Trading Setup DetailsIdentifying Smart Money trading opportunities involves the following process:Price breaks previous lows → Liquidity is harvested → CHoCH signal forms (lower lows, higher highs) → Price returns to demand zone or order block → Wait for confirmation signal before entering → Set stop-loss below the block → Take profit at the next liquidity levelThe key is to patiently wait for the price to return to these critical areas. Don't rush into trades; confirmation is the foundation of all successful trading.## Risk Control Always Comes FirstEven with Smart Money strategies, strict risk management is essential:- Limit risk per trade to 1-2% of the account  - Always set stop-loss and take-profit levels  - Wait for clear confirmation signals; avoid guessingThe reason Smart Money continues to profit is not just their strategies but their discipline.## Key Points to Learn from Smart MoneyTrading success depends not on indicators but on understanding the real story behind the charts. Price fluctuations, order accumulation, liquidity transfer—all tell what institutions are doing.**Next Episode Preview:** We will delve into how to identify liquidity traps before they form, so you can get ahead of the institutions.#smartmoney #smc #cryptotrading #OrderBlocks #TradingStrategy