KILLED · untestable core
Hypothesis
Institutions ("smart money") leave a footprint, order blocks, liquidity pools resting above/below swing highs and lows, and fair value gaps (FVG). Price returns to these zones to fill imbalance and grab liquidity; trading the zones front-runs institutional flow.
Math: the falsifiable kernel
The only objectively-codable pieces. A 3-candle fair value gap (bullish):
$$ \text{FVG} \iff \text{high}_{t-1} < \text{low}_{t+1}\quad(\text{price imbalance between } t-1,\,t+1) $$
A liquidity sweep / stop-run = wick beyond a prior swing extreme, close back inside:
$$ \text{sweep} \iff \big(\text{low}_t < \min_{k \text{swingLow}\big) $$
Method
Mechanized the falsifiable rules, liquidity sweep of a prior swing, then entry on return into the nearest FVG, and tested forward returns across 50 symbols with full costs, removing the human who normally draws the zones after the fact.
Results
| Stop-runs / sweeps are real | yes: they happen |
| FVG "fill" rate | ~90%: but price fills most gaps anyway |
| Mechanical sweep→FVG entry, net edge | ≈ 0 |
| "Order block" selection | unfalsifiable (drawn post-hoc) |
The testable kernel is real but unprofitable: liquidity sweeps (stop-runs) genuinely occur, and FVGs genuinely fill, but price fills almost any gap eventually, so the "fill" predicts nothing, and the mechanized sweep→entry has no net edge after cost. The rest of SMC, choosing which order block, which liquidity pool, is drawn after the move and cannot be falsified (same trap as Elliott Wave, N-093). A real phenomenon wrapped in an untestable presentation. Killed as a system.
SMC/ICT names something real (stop-hunts exist) and surrounds it with after-the-fact chart-drawing. The part you can test does not pay; the part that "works" cannot be tested. That is the signature of a narrative, not an edge.