The Flow of Smart Money: How Liquidity Changes Hands and How You Read the Chart to Follow It

Breaking the Myth. The market doesn’t move because of buyers and sellers. Follow up of https://medium.com/coinmonks/the-truth-about-smart-money-mastering-liquidity-fair-value-gaps-and-market-structure-01dd093d21c1

The Trap

I still remember that chart like a scar. A clean breakout, a perfect H1 setup. I pressed Buy confidently; five minutes later, price reversed, grabbed my stop, and sprinted away — without me. It felt personal, and so many other times but it wasn’t. It was the algorithm doing what it always does: hunting liquidity.

For months, I thought I just needed better entries. But what I really needed was better vision — to see how money moves. Then I understood Algorithm Theory ICT — that finally explained that I was missing: the flow of smart money.

It showed how price doesn’t just move randomly. It moves to collect orders, to transfer risk, to deliver price between big players.

1. Liquidity: The Fuel of Every Move

Forget the myth of pure supply and demand. The real engine of price is liquidity — the pool of stop orders, pending entries, and trapped traders that fuels the next institutional move. When price rallies or drops, it’s not always chasing…