Smart Money Flow Index (SMFI) - Advanced SMC [PhenLabs]

📊Smart Money Flow Index (SMFI) [PhenLabs]
Version: PineScript™v6

📌Description
The Smart Money Flow Index (SMFI) is an advanced Smart Money Concepts implementation that tracks institutional trading behavior through multi-dimensional analysis. This comprehensive indicator combines volume-validated Order Block detection, Fair Value Gap identification with auto-mitigation tracking, dynamic Liquidity Zone mapping, and Break of Structure/Change of Character detection into a unified system.

Unlike basic SMC indicators, SMFI employs a proprietary scoring algorithm that weighs five critical factors: Order Block strength (validated by volume), Fair Value Gap size and recency, proximity to Liquidity Zones, market structure alignment (BOS/CHoCH), and multi-timeframe confluence. This produces a Smart Money Score (0-100) where readings above 70 represent optimal institutional setup conditions.

🚀Points of Innovation
Volume-Validated Order Block Detection – Only displays Order Blocks when formation candle exceeds customizable volume multiplier (default 1.5x average), filtering weak zones and highlighting true institutional accumulation/distribution

Auto-Mitigation Tracking System – Fair Value Gaps and Order Blocks automatically update status when price mitigates them, with visual distinction between active and filled zones preventing trades on dead levels

Proprietary Smart Money Score Algorithm – Combines weighted factors (OB strength 25%, FVG proximity 20%, Liquidity 20%, Structure 20%, MTF 15%) into single 0-100 confidence rating updating in real-time

ATR-Based Adaptive Calculations – All distance measurements use 14-period Average True Range ensuring consistent function across any instrument, timeframe, or volatility regime without manual recalibration

Dynamic Age Filtering – Automatically removes liquidity levels and FVGs older than configurable thresholds preventing chart clutter while maintaining relevant levels

Multi-Timeframe Confluence Integration – Analyzes higher timeframe bias with customizable multipliers (2-10x) and incorporates HTF trend direction into Smart Money Score for institutional alignment

🔧Core Components
Order Block Engine – Detects institutional supply/demand zones using characteristic patterns (down-move-then-strong-up for bullish, up-move-then-strong-down for bearish) with minimum volume threshold validation, tracks mitigation when price closes through zones

Fair Value Gap Scanner – Identifies price imbalances where current candle's low/high leaves gap with two-candle-prior high/low, filters by minimum size percentage, monitors 50% fill for mitigation status

Liquidity Zone Mapper – Uses pivot high/low detection with configurable lookback to mark swing points where stop losses cluster, extends horizontal lines to visualize sweep targets, manages lifecycle through age-based removal

Market Structure Analyzer – Tracks pivot progression to identify trend through higher-highs/higher-lows (bullish) or lower-highs/lower-lows (bearish), detects Break of Structure and Change of Character for trend/reversal confirmation

Scoring Calculation Engine – Evaluates proximity to nearest Order Blocks using ATR-normalized distance, assesses FVG recency and distance, calculates liquidity proximity with age weighting, combines structure bias and MTF trend into smoothed final score

🔥Key Features
Customizable Display Limits – Control maximum Order Blocks (1-10), Liquidity Zones (1-10), and FVG age (10-200 bars) to maintain clean charts focused on most relevant institutional levels

Gradient Strength Visualization – All zones render with transparency-adjustable coloring where stronger/newer zones appear more solid and weaker/older zones fade progressively providing instant visual hierarchy

Educational Label System – Optional labels identify each zone type (Bullish OB, Bearish OB, Bullish FVG, Bearish FVG, BOS) with color-coded text helping traders learn SMC concepts through practical application

Real-Time Smart Money Score Dashboard – Top-right table displays current score (0-100) with color coding (green >70, yellow 30-70, red <30) plus trend arrow for at-a-glance confidence assessment

Comprehensive Alert Suite – Configurable notifications for Order Block formation, Fair Value Gap detection, Break of Structure events, Change of Character signals, and high Smart Money Score readings (>70)

Buy/Sell Signal Integration – Automatically plots triangle markers when Smart Money Score exceeds 70 with aligned market structure and fresh Order Block detection providing clear entry signals

🎨Visualization
Order Block Boxes – Shaded rectangles extend from formation bar spanning high-to-low of institutional candle, bullish zones in green, bearish in red, with customizable transparency (80-98%)

Fair Value Gap Zones – Rectangular areas marking imbalances, active FVGs display in bright colors with adjustable transparency, mitigated FVGs switch to gray preventing trades on filled zones

Liquidity Level Lines – Dashed horizontal lines extend from pivot creation points, swing highs in bearish color (short targets above), swing lows in bullish color (long targets below), opacity decreases with age

Structure Labels – "BOS" labels appear above/below price when Break of Structure confirmed, colored by direction (green bullish, red bearish), positioned at 1% beyond highs/lows for visibility

Educational Info Panel – Bottom-right table explains key terminology (OB, FVG, BOS, CHoCH) and score interpretation (>70 high probability) with semi-transparent background for readability



📖Usage Guidelines

General Settings
Show Order Blocks – Default: On, toggles visibility of institutional supply/demand zones, disable when focusing solely on FVGs or Liquidity

Show Fair Value Gaps – Default: On, controls FVG zone display including active and mitigated imbalances

Show Liquidity Zones – Default: On, manages liquidity line visibility, disable on lower timeframes to reduce clutter

Show Market Structure – Default: On, toggles BOS/CHoCH label display

Show Smart Money Score – Default: On, controls score dashboard visibility

Order Block Settings

OB Lookback Period – Default: 20, Range: 5-100, controls bars scanned for Order Block patterns, lower values detect recent activity, higher values find older blocks

Min Volume Multiplier – Default: 1.5, Range: 1.0-5.0, sets minimum volume threshold as multiple of 20-period average, higher values (2.0+) filter for strongest institutional candles

Max Order Blocks to Display – Default: 3, Range: 1-10, limits simultaneous Order Blocks shown, lower settings (1-3) maintain focus on most recent zones

Fair Value Gap Settings

Min FVG Size (%) – Default: 0.3, Range: 0.1-2.0, defines minimum gap size as percentage of close price, lower values detect micro-imbalances, higher values focus on significant gaps

Max FVG Age (bars) – Default: 50, Range: 10-200, removes FVGs older than specified bars, lower settings (10-30) for scalping, higher (100-200) for swing trading

Show FVG Mitigation – Default: On, displays filled FVGs in gray providing visual history, disable to show only active untouched imbalances

Liquidity Zone Settings

Liquidity Lookback – Default: 50, Range: 20-200, sets pivot detection period for swing highs/lows, lower values (20-50) mark shorter-term liquidity, higher (100-200) identify major swings

Max Liquidity Age (bars) – Default: 100, Range: 20-500, removes liquidity lines older than specified bars, adjust based on timeframe

Liquidity Sensitivity – Default: 0.5, Range: 0.1-1.0, controls pivot detection sensitivity, lower values mark only major swings, higher values identify minor swings

Max Liquidity Zones to Display – Default: 3, Range: 1-10, limits total liquidity levels shown maintaining chart clarity

Market Structure Settings

Pivot Length – Default: 5, Range: 3-15, defines bars to left/right for pivot validation, lower values (3-5) create sensitive structure breaks, higher (10-15) filter for major shifts

Min Structure Move (%) – Default: 1.0, Range: 0.1-5.0, sets minimum percentage move required between pivots to confirm structure change

Multi-Timeframe Settings

Enable MTF Analysis – Default: On, activates higher timeframe trend analysis incorporation into Smart Money Score

Higher Timeframe Multiplier – Default: 4, Range: 2-10, multiplies current timeframe to determine analysis timeframe (4x on 15min = 1hour)

Visual Settings

Bullish Color – Default: Green (#089981), sets color for bullish Order Blocks, FVGs, and structure elements

Bearish Color – Default: Red (#f23645), defines color for bearish elements

Neutral Color – Default: Gray (#787b86), controls color of mitigated zones and neutral elements

Show Educational Labels – Default: On, displays text labels on zones identifying type (OB, FVG, BOS), disable once familiar with patterns

Order Block Transparency – Default: 92, Range: 80-98, controls Order Block box transparency

FVG Transparency – Default: 92, Range: 80-98, sets Fair Value Gap zone transparency independently from Order Blocks

Alert Settings

Alert on Order Block Formation – Default: On, triggers notification when new volume-validated Order Block detected

Alert on FVG Formation – Default: On, sends alert when Fair Value Gap appears enabling quick response to imbalances

Alert on Break of Structure – Default: On, notifies when BOS or CHoCH confirmed

Alert on High Smart Money Score – Default: On, alerts when Smart Money Score crosses above 70 threshold indicating high-probability setup

✅Best Use Cases
Order Block Retest Entries – After Break of Structure, wait for price retrace into fresh bullish Order Block with Smart Money Score >70, enter long on zone reaction targeting next liquidity level

Fair Value Gap Retracement Trading – When price creates FVG during strong move then retraces, enter as price approaches unfilled gap expecting institutional orders to continue trend

Liquidity Sweep Reversals – Monitor price approaching swing high/low liquidity zones against prevailing Smart Money Score trend, after stop hunt sweep watch for rejection into premium Order Block/FVG

Multi-Timeframe Confluence Setups – Identify alignment when current timeframe Order Block coincides with higher timeframe FVG plus MTF analysis showing matching trend bias

Break of Structure Continuations – After BOS confirms trend direction, trade pullbacks to nearest Order Block or FVG in direction of structure break using Smart Money Score >70 as entry filter

Change of Character Reversal Plays – When CHoCH detected indicating potential reversal, look for Smart Money Score pivot with opposing Order Block formation then enter on structure confirmation

⚠️Limitations
Lagging Pivot Calculations – Pivot-based features (Liquidity Zones, Market Structure) require bars to right of pivot for confirmation, meaning these elements identify levels retrospectively with delay equal to lookback period

Whipsaw in Ranging Markets – During choppy conditions, Order Blocks fail frequently and structure breaks produce false signals as Smart Money Score fluctuates without clear institutional bias, best used in trending markets

Volume Data Dependency – Order Block volume validation requires accurate volume data which may be incomplete on Forex pairs or limited in crypto exchange feeds

Subjectivity in Scoring Weights – Proprietary 25-20-20-20-15 weighting reflects general institutional behavior but may not optimize for specific instruments or market regimes, user cannot adjust factor weights

Visual Complexity on Lower Timeframes – Sub-hour timeframes generate excessive zones creating cluttered charts, requires aggressive display limit reduction and higher minimum thresholds

No Fundamental Integration – Indicator analyzes purely technical price action and volume without incorporating economic events, news catalysts, or fundamental shifts that override technical levels

💡What Makes This Unique
Unified SMC Ecosystem – Unlike indicators displaying Order Blocks OR FVGs OR Liquidity separately, SMFI combines all three institutional concepts plus market structure into single cohesive system

Proprietary Confidence Scoring – Rather than manual setup assessment, automated Smart Money Score quantifies probability by weighting five institutional dimensions into actionable 0-100 rating

Volume-Filtered Quality – Eliminates weak Order Blocks forming without institutional volume confirmation, ensuring displayed zones represent genuine accumulation/distribution

Adaptive Lifecycle Management – Automatically updates mitigation status and removes aged zones preventing trades on dead levels through continuous validity and age monitoring

Educational Integration – Built-in tooltips, labeled zones, and reference panel make indicator functional for both learning Smart Money Concepts and executing strategies

🔬How It Works
Order Block Detection – Scans for patterns where strong directional move follows counter-move creating last down-candle before rally (bullish OB) or last up-candle before sell-off (bearish OB), validates formations only when candle exhibits volume exceeding configurable multiple (default 1.5x) of 20-bar average volume

Fair Value Gap Identification – Compares current candle’s high/low against two-candles-prior low/high to detect price imbalances, calculates gap size as percentage of close and filters micro-gaps below minimum threshold (default 0.3%), monitors whether subsequent price fills 50% triggering mitigation status

Liquidity Zone Mapping – Employs pivot detection using configurable lookback (default 50 bars) to identify swing highs/lows where retail stops cluster, extends horizontal reference lines from pivot creation and applies age-based filtering to remove stale zones

Market Structure Analysis – Tracks pivot progression using structure-specific lookback (default 5 bars) to determine trend, confirms uptrend when new pivot high exceeds previous by minimum move percentage, detects Break of Structure when price breaks recent pivot level, flags Change of Character for potential reversals

Multi-Timeframe Confluence – When enabled, requests security data from higher timeframe (current TF × HTF multiplier, default 4x), compares HTF close against HTF 20-period MA to determine bias, contributes ±50 points to score ensuring alignment with institutional positioning on superior timeframe

Smart Money Score Calculation – Evaluates Order Block component via ATR-normalized distance producing max 100-point contribution weighted at 25%, assesses FVG factor through age penalty and distance at 20% weight, calculates Liquidity proximity at 20%, incorporates structure bias (±50-100 points) at 20%, adds MTF component at 15%, applies 3-period smoothing to reduce volatility

Visual Rendering and Lifecycle – Draws Order Block boxes, Fair Value Gap rectangles with color coding (green/red active, gray mitigated), extends liquidity dashed lines with fade-by-age opacity, plots BOS labels, displays Smart Money Score dashboard, continuously updates checking mitigation conditions and removing elements exceeding age/display limits

💡Note:
The Smart Money Flow Index combines multiple Smart Money Concepts into unified institutional order flow analysis. For optimal results, use the Smart Money Score as confluence filter rather than standalone entry signal – scores above 70 indicate high-probability setups but should be combined with risk management, higher timeframe bias, and market regime understanding.