🟣 Smart Money Zones Indicator - Chewy

https://www.tradingview.com/script/ArrZaF2e-Smart-Money-Zones-THT-chewy/

Smart Money Zones (SMZ) & Execution Workflow

Objective:

To equip traders — from beginner to advanced — with a clear, repeatable process for identifying, marking, and trading institutional buy/sell zones using Smart Money Zones & Chewy’s custom indicator.

1. Core Principles & Psychology

Market structure is the foundation for all trading.

Price moves in patterns of highs and lows that reflect the balance between buyers and sellers.

If you can read that structure and understand where smart money enters, you can spot low-risk, high-reward setups before they happen.

Institutional Behavior:

• Institutions don’t chase price.
• They buy at discounts and sell at premiums.
• They often push price past common retail levels to trigger stop losses before entering themselves (stop hunts).

This is why we use Smart Money Zones: to find the exact price ranges where big players step in.

2. Market Structure Basics

Bullish Structure:

• Higher Highs (HH) + Higher Lows (HL) = uptrend
• Pullbacks are buying opportunities

Bearish Structure:

• Lower Highs (LH) + Lower Lows (LL) = downtrend
• Rallies are shorting opportunities

Compression:

• HL + LH in same range = market is coiling
• This is normally a signal of “continuation” of the current trend or structure.

3. Change of Character (CHoCH) & Break of Structure (BOS)

• CHoCH: First sign of trend reversal (HH after LLs or LL after HHs).
• BOS: Confirmed trend shift when price closes beyond a prior swing high (bullish) or swing low (bearish).

Rule: Only trade in the direction of the most recent BOS unless counter-trend is part of your tested playbook.

Bullish CHoCH:

• After a series of LLs and LHs, we see a Higher High (HH) followed by a Higher Low (HL)
• This signals sellers are losing control and buyers are stepping in

Bearish CHoCH:

• After a series of HHs and HLs, we get a Lower Low (LL) followed by a Lower High (LH)
• This signals that buyers are exhausted and sellers are taking over

4. Tool Setup

Chewy’s SMZ Indicator

Smart Money Zones are based on Fibonacci retracement from recent swing highs and lows.

While you should learn to draw these manually for full understanding, the THT Smart Money Indicator by Chewy automates the process with precision.

• Automatically plots institutional buy/sell zones
• Get access to this indicator at the top of this page

Fibonacci Retracement (THT Template)

• Levels: 0 (BOS), 0.618 (Golden Pocket), 0.786 (Golden Pocket), 0.826 (Optimal Trade Entry), 1 (Target)
• Style: white lines, no background shading for a clean chart
• Save as “THT FIB” template for quick use

5. Drawing & Marking Smart Money Zones

Bearish Setup:

1. After BOS to downside, pull Fib from swing high → swing low
2. Institutional Sell Zone: 0.618–0.786 (red rectangle)
3. Smart Money Zone (SMZ): 0.786–0.826 (bright purple rectangle)

Bullish Setup:

1. After BOS to upside, pull Fib from swing low → swing high
2. Institutional Buy Zone: 0.618–0.786 (blue rectangle)
3. Smart Money Zone (SMZ): 0.786–0.826 (bright purple)

6. Entry Confirmation Rules

Primary Entry: Inside SMZ with BX Trender confirmation.

Confirmation Steps:

1. BX Trender forms a Higher Low (HL) in bullish setups or Lower High (LH) in bearish setups inside the SMZ.

7. Stops & Targets

Stops:

• Conservative: Beyond BOS level
• Aggressive: Candle close beyond SMZ

Targets:

• Target 1: Equal high/low
• Target 2: Fib Extensions
  • 1.272 = conservative
  • 1.618 = aggressive
• Optional: Trail with BX Trender color change

8. Multi-Timeframe Confluence

• Macro SMZ (weekly/daily) > micro SMZ (4H/1H)

In the example below SOFI Weekly chart pulled back into the bottom of the institutional buy zone, and top of the smart money zone.

If you were using a multi timeframe approach, you could zoom into the 1hr or 4hr timeframe to “hunt” a bottom using the BX trender.

On the first sign of higher low 4hr BX, we could have entered a position and set a stop loss below the smart money if price fully closed one candle below it. 

As price confirms a bottom and NEVER closes below our stop loss level, we then move out to the weekly chart and follow the BX trender from there.

9. Mechanical Workflow Checklist

Before Entry:

• [ ] Identify trend & mode (capitulation, impulse, compression)
• [ ] Mark untaken highs/lows
• [ ] Wait for BOS or CHoCH
• [ ] Draw Fib, mark Institutional Zone & SMZ
• [ ] Check BX Trender & Market Bias alignment
• [ ] Confirm macro context

During Trade:

• [ ] Enter inside smart money zone. You may hunt on smaller timeframes using BX
• [ ] Manage stop-loss per plan and wait for candle closure under key levels.
• [ ] Scale out at Target 1, trail or close remainder at Target 2

After Trade:

• [ ] Screenshot and log in journal
• [ ] Note if setup followed all rules
• [ ] Review missed/failed trades for rule breaks

10. Key Edges in This Method

• Trading at institutional pricing, not retail levels
• Using multi-timeframe structure to filter trades
• Combining Chewy’s SMZ auto-plot with manual Fib for precision
• Confirming with BX Trender to avoid premature entries
• Defined stops and targets for high R:R setups

Bonus Learning ⭐️

****Below you can find private live streams and past courses going over smart money zones, and structure.

Beginner Live Stream - Market Structure 👇
https://www.youtube.com/live/lM2ucx_j8oY

Private Market Structure Workshop 👇
https://www.youtube.com/watch?v=KlyOJsWZkmA