SMT divergence

SMT compares two markets that normally move together. When one makes a new low and the other does not, the new low was probably just a liquidity grab.

Market A makes a lower low.

Market B, which usually moves with A, makes a higher low. That is bullish SMT.

Rules

Use correlated pairs: EURUSD with GBPUSD, gold with silver, or a pair against DXY (which moves the other way).
Bullish SMT: one market sweeps a low, the other holds a higher low.
Bearish SMT: one makes a higher high, the other a lower high.
SMT adds confidence at a key level, especially during the manipulation quarter. On its own it is not an entry.

Check yourself

1. EURUSD makes a lower low while GBPUSD makes a higher low. What is it?

Completion history

Nothing yet. Each time you mark a lesson complete, it is saved here, in this browser only.

Study notes in my own words, based on the MSNR "Trading Secret Algorithm" and Alchemist (White) materials. Educational only, not financial advice. Practise on a demo account and with TradingView Bar Replay before risking real money.