Glossary

23 terms: Smart Money Concepts, indicators and models Sentinel scores.

Updated 22 Sep 2026

Smart Money Concepts (SMC): A price-action method that reads charts through the orders of large participants: order blocks, fair-value gaps, liquidity pools, sweeps and breaks of market structure. It describes where price is likely to react, not where it must go.
Order block: The last opposite-colored candle before a strong move that breaks structure. The candle's range marks a zone where large orders are assumed to have filled, and price often reacts when it returns there.
Fair value gap: A three-candle pattern where the first candle's high and the third candle's low do not overlap (or the reverse for a down move). The untraded range between them is the gap. Price often returns to fill part of it.
Market structure (BOS and CHoCH): A trend is a sequence of swing highs and lows. A break of structure (BOS) takes out the last swing in the trend's direction. A change of character (CHoCH) takes out a swing against it and is the first sign the trend may turn.
Liquidity sweep: A move that trades through an obvious high or low, where stop orders sit, then closes back inside the range. The stops supply the liquidity; the close back inside is the signal.
Liquidity pool: A cluster of resting orders, usually stop losses, above equal highs or below equal lows. Pools are the targets a sweep runs into.
Inducement: A minor swing that invites early entries before the real move. Its stops become liquidity that price takes before reaching the zone that matters.
Breaker block: An order block that failed: price broke through it with force. The broken zone often flips role, so former support acts as resistance and the reverse.
Premium and discount zones: The range between a swing low and a swing high, split at its midpoint (equilibrium). Above the midpoint is premium, below it is discount. Longs from discount and shorts from premium are the textbook use.
Stop hunt: A fast move into a level where many stop orders sit, followed by a reversal. The Stop-Hunt Probability engine estimates how likely the current move is to be one.
Pump and dump pattern: A sharp, volume-driven move in one direction that is often followed by a fast reversal. The Pump / Dump Combination engine scores that sequence.
RSI and Stochastic RSI: RSI compares the size of recent up closes with recent down closes on a 0 to 100 scale; readings near the edges mark stretched moves. Stochastic RSI applies the stochastic formula to RSI itself, so it turns faster.
Exponential moving average (EMA): An average of closing prices that weights recent candles more heavily than a simple average. Price above a rising EMA reads as an uptrend.
MACD: The difference between a fast and a slow EMA, plotted with a signal line (an EMA of that difference). Crosses and the histogram's slope read momentum.
Bollinger Bands: A moving average with bands a set number of standard deviations above and below it. Narrow bands mark low volatility; closes outside the bands mark stretched moves.
Average true range (ATR): The average size of a candle's true range (high to low, including gaps from the prior close) over a lookback window. It measures volatility, not direction.
VWAP: The average traded price weighted by volume over a session or anchor period. Price above VWAP means recent buyers are, on average, in profit.
On-balance volume (OBV): A running total that adds a candle's volume on an up close and subtracts it on a down close. OBV rising while price is flat reads as accumulation.
Hidden Markov model regime: A statistical model that assumes the market switches between hidden states, such as trending and ranging, and estimates which state produced the recent returns.
Kalman filter: A recursive estimator that separates a price series into a smoothed level and velocity plus noise, updating the estimate on every new candle.
Ricci flow: A geometric measure borrowed from differential geometry, applied here to the shape of the recent price path to flag acceleration and bends in a trend.
Kronos forecast: A time-series forecasting model that projects the next candles from the recent ones. A forecast is a model output, not an observation.
Evidence Score: Sentinel's 0 to 100 tally of how strongly its engines agree on a setup. It is not a win probability: measured out of sample, it did not separate winners from losers.