Transcription
Most traders don't have a problem spotting good setups. Their real problem is poor entries. You either enter too early and get stopped out or you wait too long and miss the move entirely.
In this video, I'm going to show you the exact entry model smart money traders use every single day so you can finally stop second-guessing your entries and start getting in with confidence, precision, and tight stop losses. Let's break it down into five simple steps.
Step number one, understand the power of liquidity zones. Before you can enter with precision, you first need to understand where to enter. And the answer is near liquidity. Liquidity zones are areas on the chart where large volumes of stop-losses or pending orders are sitting, often just above previous highs or just below previous lows. Smart money traders don't chase price. They let price grab liquidity and then they look to enter in the opposite direction. So if you're not entering around liquidity, you're already working against the odds. Your job is to identify the liquidity pools, wait for price to run them, and only then prepare for a potential trade.
Step two, look for the CISD, the change in state of delivery. Just because price taps into a liquidity pool, doesn't mean it's ready to reverse. You need confirmation and this is where the CISD comes into play. The CISD is the first clear sign that the market may be shifting direction. Let's say price has been making lower highs and lower lows. Then suddenly after grabbing sell-side liquidity, it breaks the previous lower high. That shift in structure, that's your CISD. It tells you something has changed. If price just hits liquidity and bounces without shifting structure, it could be a fake out. But a CISD after a liquidity sweep gives you confluence and that's where your edge begins.
Step number three, refine your entry with fair value gaps. Once you've identified a CISD, the next thing to look for is a fair value gap. These gaps are imbalances where price moved aggressively and left unfilled orders. Smart money often reuses these areas as fuel for the next leg of the move. After a CISD, price usually pulls back and if it returns to a fair value gap, that becomes a high probability entry zone. You're no longer guessing. You're waiting for price to come to you inside an area where market makers previously moved the market. Your stop loss can be tighter, your entry more precise, and your RNR significantly better.
Step number four, use a trigger to enter with precision. Now that you found your fair value gap, you still need a trigger. Something that tells you the market is ready. Two of the best smart money triggers are the breaker block and the rejection wick. A breaker block is where price retests a failed order block and shows rejection. A rejection wick is when price taps into the fair value gap and instantly gets rejected, leaving a long wick. Both are signs that market maker players are defending that level. And once you see that rejection, that's your entry signal. Enter immediately after the wick or rejection confirms the defense with your stop placed just beyond the invalidation points.
Step number five, place your stop loss based on structure, never on emotion. Too many traders place stops emotionally. Smart traders use structure. Your stop should always sit just beyond the level that proves your trading idea is wrong. If your entry is off a fair value gap, your stop goes beyond the gap. If you're trading based on the CISD, your stop can go just below the swing that created that shift. Too wide and you kill your risk-to-reward too tight and you get wicked out. Structure-based stops give you clarity and edge.
To fix your entries, start with identifying where liquidity lies. Wait for a CISD after the liquidity is swept. Locate the fair value gap that price might return back to. Wait for a trigger like a rejection wick or breaker block to enter. Place your stop beyond the structure that invalidates your bias. That's the entry model smart money traders rely on daily. And once you lock this in, you'll stop forcing trades, stop overtrading, and start trading with clarity and conviction.
If you want to see how this works on live markets, check out this next video. And if you'd like tools that help you identify CISD, fair value gaps, and liquidity in real time, check out our SMC indicator suite. Link is in the description below.