2025 Lecture Series: How Does the SMC Algorithmic Market on Close Macro Work?

TL;DR

The SMC algorithmic Market on Close macro is demonstrated as a reversal setup that shorts inside an inversion fair value gap after the regular-hours daily high is considered set. The speaker builds a 10-lot position, keeps the stop above the gap, and targets sell-side liquidity below a swing low formed before 3:10 p.m. Read on for the setup’s entry, stop, confirmation, and target details.

Transcript

all right folks welcome back this is smart money concept algorithmic Market on close macro it's a mouthful I know uh so I'm about to demonstrate something that your other mentors out there are not going to be able to duplicate they might talk about about the last hour trading and macros existing but they're not going to be able to show you what thi... Read More

Key Insights

• The Market on Close macro is a last-hour trading window where the speaker claims price runs on an algorithmic script, letting him short inside an inversion fair value gap while other live streamers stay bullish looking for longs.
• An inversion fair value gap is a former bullish buy-side/sell-side efficiency that flips to act as resistance; the speaker shades it orange and expects candle bodies to respect it rather than close above it.
• The stop loss is placed just above the inversion fair value gap and is never moved higher, because the daily high on regular trading hours is treated as already set and no higher high is expected.
• Consequent encroachment is the midpoint of the inversion fair value gap; the speaker watches price meander around and kiss this midpoint as confirmation the short thesis is still valid.
• Wicks are permitted to form above the inversion fair value gap without invalidating the trade, but bodies closing above it would be the warning; the speaker repeats that price 'shall not pass' the stop.
• The downside target is resting sell-side liquidity below a swing low that formed prior to 3:10 p.m., along with a blue-shaded bid-bound sell-side efficiency treated as a discount array.
• A rejection block, defined as the highest up-closed candle prior to the rotation lower, marks the worst-case level price could return to while the stop loss stays correctly placed.
• The speaker scales in from 10 lots up to 16 contracts, adding at the consequent encroachment and upper end of the gap, framing the target as low-hanging-fruit sell-side liquidity.

Questions & Answers

Q: What is the SMC algorithmic Market on Close macro?

The speaker presents it as a last-hour reversal pattern based on an algorithmic script that price follows. In this demonstration, he establishes a short inside an inversion fair value gap after treating the regular-hours daily high as already set.

Q: How does the speaker enter the Market on Close short trade?

He shorts inside a former bullish buy-side and sell-side efficiency fair value gap that has become an inversion fair value gap. He adds positions near the gap’s upper end and at its consequent encroachment, building the trade to an even 10 lots.

Q: What is an inversion fair value gap in this setup?

The speaker describes it as a former bullish buy-side and sell-side efficiency fair value gap that now acts as a bearish area. He shades it orange and expects candle bodies to respect it while he establishes and adds to the short.

Q: Where is the stop loss placed, and why is it not moved higher?

The stop loss is placed above the inversion fair value gap and remains fixed. The speaker’s reasoning is that the regular-hours daily high has already been set, so his script does not anticipate a higher high, although he acknowledges that an unexpected manipulation could stop him out.

Q: Do wicks above the inversion fair value gap invalidate the trade?

No, the speaker says small wicks above the inversion fair value gap are permissible. He focuses on whether candle bodies respect the shaded area and watches price approach the stop without reaching it.

Q: What does consequent encroachment mean in this trade?

Consequent encroachment is the level inside the inversion fair value gap where the speaker adds more to his position. In the demonstration, adding there helps bring the total short position to 10 lots.

Q: What is the downside target for the short trade?

The initial target is sell-side liquidity below a swing low formed before 3:10 p.m. Below that low, the speaker also identifies a blue-shaded bid-bound sell-side efficiency as a discount array and places a limit order toward the targeted area.

Q: What price behavior confirms the speaker’s short thesis?

He looks for candle bodies to respect the orange-shaded inversion fair value gap and for price to reject from it and move lower. His immediate concern is whether price drops toward the first minor sell-side liquidity pool directly or first returns to the gap and forms additional wicks.

Summary & Key Takeaways

• The speaker demonstrates a live short trade using the Smart Money Concept algorithmic Market on Close macro, a last-hour setup. He enters inside an inversion fair value gap, a former bullish buy-side and sell-side efficiency that has flipped, shading it orange and adding contracts as price sits at its upper end.

• Stop-loss management is the core lesson: the stop is placed just above the inversion fair value gap and never moved higher because the daily high is already set. Wicks above the gap are permitted, but bodies must respect the shaded area, so the speaker is not worried about being stopped out.

• The target is sell-side liquidity below a swing low formed before 3:10 p.m., plus a blue-shaded bid-bound sell-side efficiency discount array. The speaker contrasts himself with live streamers and bull-flag traders who are bullish, predicting a rug pull lower while he scales into 16 contracts.