From Retail Concepts to Smart Money — How to Evolve Your Trading Framework in 2025

If you’ve traded for a while, you’ve probably gone through the usual “retail” education:

• Support and resistance
• Trendlines and chart patterns
• Indicators like RSI, MACD, moving averages

Then you discovered Smart Money Concepts (SMC)—BOS/CHOCH, liquidity grabs, order blocks, fair value gaps—and it felt like a completely different universe.

This guide shows you how to bridge the gap:

• How classic retail ideas map into SMC concepts
• How to evolve your framework without throwing away everything you’ve learned
• How to make your trading more rule‑based and testable
• How to use HorizonAI to modernize your playbook and automate parts of it

Retail vs Smart Money: Same Market, Different Lens

Retail trading and SMC are looking at the same price data:

• Retail:
  • Talks about “support/resistance,” “double tops,” and “fakeouts”
• SMC:
  • Talks about “liquidity,” “order flow,” and “stop hunts”

Underneath:

• Support = prior lows with resting liquidity (long stops, breakout shorts)
• Resistance = prior highs with resting liquidity (short stops, breakout buys)
• Fakeouts = liquidity grabs / stop hunts
• Breakouts = BOS, often with displacement and volume

Instead of discarding retail ideas, you can relabel and refine them with SMC language.

Mapping Retail Concepts to SMC

1. Support & Resistance → Liquidity Pools

Retail:

• Draws horizontal lines at previous highs and lows
• Expects price to “bounce” there

SMC:

• Sees those same levels as liquidity pools:
  • Above highs: buy stops and short stops
  • Below lows: sell stops and long stops
• Asks:
  • “Will price raid these levels and reverse?”
  • “Or will it break and continue with displacement (BOS)?”

2. Trendlines → Market Structure (HH/HL, LH/LL)

Retail:

• Draws diagonal lines to show trends
• Buys at trendline support, sells at trendline resistance

SMC:

• Focuses on swing highs and lows:
  • HH/HL in uptrends
  • LH/LL in downtrends
• Uses BOS and CHOCH to define:
  • Trend continuation or reversal

3. Patterns → Liquidity & Structure Stories

Retail patterns:

• Double top, double bottom
• Head and shoulders
• Triangles and flags

SMC lens:

• Double tops / bottoms:
  • Equal highs/lows = stacked liquidity
  • Perfect place for stop hunts
• Head and shoulders:
  • Often a visual CHOCH + lower high sequence
• Triangles:
  • Compression before a liquidity expansion

Instead of memorizing pattern names, you learn to ask:

• “Where is the liquidity?”
• “Who is trapped if price goes here?”

How to Transition Without Overwhelm

You don’t have to flip a switch and become “pure SMC” overnight.

Phase 1: Translate, Don’t Replace

Take your existing setups and ask:

• Where is the liquidity in this setup?
• What’s the market structure (HH/HL or LH/LL)?
• Am I trading toward or away from obvious liquidity?

Examples:

• Instead of “buy at support,” think:
  • “Is this level where stops are pooled, or am I entering after a raid?”
• Instead of “sell at resistance,” think:
  • “Has price just swept this level? Is there displacement and CHOCH after?”

Phase 2: Add Structure and Liquidity Filters

Start adding SMC filters to your retail ideas:

• Only trade pullbacks in the direction of clear structure on higher timeframes
• Avoid breakouts into major liquidity pools
• Prefer entries after a liquidity sweep + CHOCH, not before

You’ll quickly see:

• Fewer trades
• Higher quality setups
• Less “why did it fake me out again?” frustration

Phase 3: Introduce OBs and FVGs as Refinements

Once you’re comfortable with structure and liquidity:

• Use order blocks and FVGs to:
  • Refine entry zones
  • Define stops (OB/FVG boundaries)
• Keep the core idea the same—just sharpen your tools.

Making Your New Framework Testable

The biggest upgrade from “retail” to “smart money” isn’t just vocabulary—it’s testability:

• You go from:
  • “This pattern looks good”
  • To: “This structure + liquidity + OB/FVG combo has X% win rate and Y:1 RR over 200 trades.”

To get there you need:

• Clear rules:
  • How you define HH/HL, LH/LL, BOS, CHOCH
  • How you define liquidity sweeps
  • When you use OBs/FVGs as entries vs targets
• A way to turn those rules into code (Pine Script, MQL5, etc.)

That’s exactly where HorizonAI fits.

Use HorizonAI to Modernize Your Playbook

Instead of:

• Trying to manually code every new SMC idea
• Guessing how to translate your retail setups into rules

You can:

• Write your strategy in plain English:
  • “In an uptrend on 4H (HH/HL and BOS), I buy New York liquidity sweeps below prior day low when price returns to a bullish OB/FVG in discount, using EMA/RSI confirmation.”
• Ask HorizonAI to:
  • Convert it into Pine Script v6
  • Add risk management (1–2% per trade, ATR stops, RR targets)
  • Log metrics (win rate, profit factor, drawdown)

Example prompts:

"Take my current support/resistance breakout strategy and convert it to a Smart Money style model that waits for a liquidity grab beyond support/resistance plus CHOCH before entering, with 2:1 RR."

"Create a Pine Script v6 indicator that labels HH, HL, LH, LL and marks my existing support/resistance levels so I can see how often my old setups align with structure and liquidity."

"Generate a backtest comparing my old EMA crossover system vs an SMC-enhanced version that only trades in the direction of higher-timeframe structure and after liquidity sweeps."

Evolve your trading framework with HorizonAI →

Final Thoughts

Moving from “retail” concepts to Smart Money thinking doesn’t mean:

• Throwing away everything you know
• Memorizing obscure jargon

It means:

1. Seeing support/resistance as liquidity pools, not magic lines
2. Using market structure instead of only trendlines
3. Framing patterns as stories of trapped traders and order flow
4. Adding OBs and FVGs as refinements, not holy grails
5. Turning your ideas into code and backtests, so you’re driven by data, not screenshots

Once you start thinking this way, HorizonAI can help you translate your upgraded mental model into actual trading systems—so your evolution from retail to Smart Money isn’t just conceptual, it’s measurable.

Want help translating a specific retail setup into SMC language? Drop it in our Discord community and we’ll break it down with you.