Option-trading-indicator: Hack the Market: The BSM Indicator Revealed

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I started wondering why these trades were successful. If you're wondering the same thing, I have the answer!

The reason for my profits is that I entered these trades at the same time as 'smart money' traders.

By 'smart money,' I don't mean people who use special trading strategies. Instead, I'm talking about big institutional investors – you know, the large banks, hedge funds, and the players who really control the market."

This version aims to be clearer and more concise while retaining the essential meaning.

"These are the big players – the major banks, hedge funds, and the ones who really control the market.

But here's the question: How can we know when these big investors are buying or selling? That's what this video is all about.

This is called the "Bullish Smart Money" indicator. It was created by a trader named Lan94 and is mainly used for trading cryptocurrencies, stocks, and futures.

To use it, go to TradingView and search for "Bullish Smart Money."

For this video, I'll be using it on the 1-hour chart of Bitcoin.

Let's clean up the indicator settings a bit.

This indicator tracks how much money is flowing into the cryptocurrency market, specifically from these big investors.

When they buy, you'll want to buy too. When they sell, you'll want to be aware.

The main part of this indicator is a colored bar that changes between light blue, light green, brown, red, and sometimes black. This is called the "Banker Histogram."

Here's how it works:

• No bars: These big investors aren't actively trading. You should probably stay out of the market.
• Light Blue: Big investors are buying. This suggests a bullish market. You should consider buying.
• Light Green: Prices are rising strongly because these big investors are still holding their positions. Hold onto your existing buys.
• Brown: The price is likely to fall a bit after a recent rise. This is a good time to think about selling some or all of your positions.

I'll explain more about how to use this indicator to trade alongside these big players and make profits in the rest of the video."

This version aims to be more concise and easier to understand for a wider audience.

Understanding the Histogram

• Brown Bars: These show areas where the price might naturally decline after an initial rise. This is a good time to consider selling some or all of your investments.
• Dark Brown Bars: These suggest the market trend is reversing. Big investors are likely selling, so you should also take your profits if you have any.
• Red Bars (Dump Candles): These signal a sharp price drop, often caused by big investors quickly selling. This is a strong warning to sell your investments to avoid major losses.

Hot Money Plot

• Green Zone: Indicates a rising market.
• Red Zone: Indicates a falling market.

Red Dollar Sign:

• This is a sell signal. When you see it, consider selling your investments.

Moving Average

• This line acts like a minimum level for trading activity.
• You should only invest when the histogram bars are above this line.
• This indicator is mainly used for buying investments, not selling.

In essence:

This indicator helps you identify potential entry and exit points for your investments. It uses a combination of visual cues (colors, shapes) and technical analysis (moving averages) to assess market trends and suggest when to buy or sell.

Take Profit Strategy:

• No Fixed Take Profit: Instead of setting a specific price target, we wait for a "short signal" from the Bullish Smart Money Indicator.
• Short Signal: This is a signal that indicates the market might reverse and start falling. When this signal appears, we immediately sell our investment.
• 3x Risk Rule: If our investment profits reach three times our initial risk before the short signal appears, we sell our investment regardless.

Entry Conditions for Long Positions:

1. Resistance Level: The price must reach a resistance level identified by the "Breaks and Retests" indicator.
2. Price Break Above Resistance: The price must break through this resistance level and close above it. This breakout candle signals our entry point.
3. Bullish Institutional Activity:
   • The last bar on the Bullish Smart Money Indicator should be light blue.
   • The price should be above the green moving average. This suggests large investors are also buying.
4. Strong Bullish Momentum: The "Hot Money Plot" should be green, indicating strong upward market momentum.

Stop-Loss:

• The stop-loss order is placed below the most recent low point in the price.

Trade Example:

• The trade entered according to the above conditions.
• The trade reached the 3x risk profit target before a short signal appeared.
• The trade was automatically exited at the 3x profit target.

Improving the Strategy:

• The speaker encourages viewers to experiment with the indicator and strategy to find ways to improve it.
• They emphasize the importance of backtesting and forward testing any new strategy before using real money.
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