One of the biggest hurdles traders face when attempting to pass prop firm challenges is premature execution. Entering immediately when price touches an institutional level—without waiting for lower timeframe confirmation—often leads to avoidable stop-outs and unnecessary drawdown.
Mastering Smart Money Concepts (SMC) Entry Models allows you to transition from guessing to executing with high precision. By waiting for specific structural confirmations like a Change of Character (CHoCH), a Break of Structure (BOS), or a Supply/Demand Flip, you can drastically refine your risk-to-reward ratio and protect your account equity.
In this guide, we break down the three primary SMC entry models, how to identify valid confirmations on lower timeframes, and how to apply them to pass your funding evaluation.
What Is an SMC Confirmation Entry?
An SMC confirmation entry is a multi-timeframe execution technique where you wait for price to react at a higher timeframe (HTF) level—such as a high-probability order block or liquidity imbalance—and then shift to a lower timeframe (LTF, e.g., 1-minute to 5-minute) to confirm that institutional order flow has turned in your direction.
Instead of setting pending orders at HTF zones (a risk entry approach), confirmation models require the market to prove that smart money has stepped in before you risk capital.
1. The Change of Character (CHoCH) Entry Model
A Change of Character (CHoCH) is the earliest structural signal that market momentum is shifting. It occurs when price breaks the most recent sub-structure swing point that was responsible for tapping into the HTF interest zone.
How to Execute the CHoCH Model:
- Identify HTF Context: Wait for price to tap into an HTF POI during active trading hours, such as the New York session.
- Drop to LTF: Switch to the 1M or 5M chart and mark the last sub-structure swing high/low that created the push into the zone.
- Wait for Structural Break: Look for an aggressive candle body close above that swing point (the CHoCH).
- Enter on Retest: Place your entry at the newly created LTF Fair Value Gap or Order Block inside the shift.
2. The Break of Structure (BOS) Continuation Model
While CHoCH signals the initial reversal, a Break of Structure (BOS) confirms trend continuation. In SMC execution, waiting for a BOS after an initial CHoCH provides a safer entry model for conservative traders.
CHoCH vs. BOS: What’s the Difference?
| Feature | Change of Character (CHoCH) | Break of Structure (BOS) |
| Market Phase | Trend Reversal / Shift | Trend Continuation |
| Risk Profile | Aggressive (Earlier Entry) | Conservative (Higher Probability) |
| Location | First structural break inside HTF zone | Subsequent break in direction of trend |
| Win Rate Impact | Slightly lower, but larger R:R | Higher win rate, tighter target distance |
For prop firm traders working under strict daily loss limits vs max loss rules, taking BOS continuation setups often provides smoother equity curves compared to catching early reversals.
3. The Supply to Demand (Flip) Entry Model
A Flip Entry occurs when a strong supply zone fails to hold price and instead “flips” into a demand zone (or vice versa). This is a clear manifestation of an anatomy of a liquidity hunt.
Why Flip Entries Are Powerful:
- Traps Counter-Trend Traders: When retail traders try to sell off the initial LTF supply, institutions absorb their orders, pushing price straight through the zone.
- Creates Fresh Liquidity: The failed zone creates a sharp imbalance, leaving behind a clean zone for high-probability mitigation.
Step-by-Step SMC Confirmation Execution Framework
Master Institutional Execution with FB500
Navigating lower timeframe entries requires clear rule-based frameworks to avoid over-trading and rule violations.
- Pass Your Challenge: Discover how to combine these entry models into a complete prop firm system with the FB500 Funding Edge Strategy Guide.
- Explore Forex Broker 500: Visit our Forex Broker 500 Homepage to access custom MetaTrader indicators, broker reviews, and advanced SMC strategies.
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