Smart Money

The premise that smart money only sells at Fibonacci premium and only buys at Fibonacci discount is rejected. Premium and discount are not defined by Fibonacci retracement but are determined dynamically in real time by each market participant deciding whether current prices are cheap or expensive enough to act on. Orders — not geometric constructions applied to charts — define what is premium and what is discount at any given moment. Smart money positioning is evidenced by aggressive buying or selling visible in candle structure, specifically whether large buyers or sellers are dominating the auction. Big buy bubbles appearing in large green candles with increasing volume confirm smart money dominance of the auction. Before entering a trade, traders should wait for confirmation that smart money is on their side. If sellers are in control and breaking price lower with aggression, the sell side may be the better trade until buyers regain control.