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Intermediate3 min readThe FoudaLens Method · 6/10

Spotting Smart Money Moves

"Smart money" is a common name for large market participants. Nobody sees their names on screen, but their large moves can leave traces in price and volume. We will see which traces FoudaLens looks for, and why a trace is a hint, not proof.

What you will learn

  • Know the three cases that trigger the smart-money flag: high accumulation, a high liquidity vacuum or a volume surge, and meet whale trades as a separate tool.
  • Compute a volume surge yourself on an example.
  • Know the limits of this reading.
In this lesson

Traces, not names

A trading screen does not tell you who bought. What you see is price and volume. If a large player builds a big position in stages, it can leave a certain pattern in those numbers. FoudaLens looks for the pattern, not the person.

1Accumulation

The calculation looks at the last 10 sessions for three things together:

1Tight rangeThe day's high-low gap under 2%
2Steady volumeVolume at 80% or more of its average
3Quiet down daysDown days trade less than up days
The clearer the three traces, the higher the accumulation score, from 0 to 100.

The idea: the price barely moves, volume keeps coming, and the dips happen on light trading. That can be what quiet buying looks like when someone avoids pushing the price up.

2A volume surge

If the latest session's volume exceeds 2.5 times the prior 20-session average, it counts as a surge. Example: an average of 400,000 shares makes the line 400,000 × 2.5 = 1,000,000. Today traded 1,100,000, or 2.75 times, so it crossed the line.

400,000
20-day average
1,000,000
The 2.5x line
1,100,000
Today
Invented numbers. The dashed bar is the 2.5x line.

The flag "Smart accumulation detected" appears in three cases: the accumulation score passes 75, a volume surge happens, or the "liquidity vacuum" score passes 85. That score combines three things over the last 5 sessions: volume drying up below half its average, a narrower daily range than usual, and a price close to resistance.

3Large trades

This is a reading separate from the smart-money flag above, but another kind of trace FoudaLens shows for large dealings. The whale trades page lists single trades that crossed a threshold. The threshold differs per stock, by value or by shares, because a trade that is large for a small stock can be ordinary for a big one.

The limits of this reading

MythA large trade means a big player is buying.
RealityEvery trade has a buyer and a seller. The same trade could be a big player selling.
MythAccumulation means the price will rise.
RealityAccumulation does not mean a certain rise. The pattern can appear by chance.
Watch outThese readings belong to "microstructure" and are shown as a description only. They are not part of the Fouda Score or the signal.

See the large trades

The whale trades page shows large trades as they happen, and each stock page shows its volume.

Check yourself

1. The average volume is 200,000 shares. Where is the 2.5x line?

200,000 × 2.5 = 500,000. A surge must exceed that line, so exactly 500,000 is not a surge.

2. A large trade appeared on a stock. What does it mean?

Every trade has two sides.

Summary

  • FoudaLens looks for traces in price and volume, not for names.
  • The flag fires on high accumulation, a liquidity vacuum or a volume surge; large trades are a separate tool.
  • A sign is not proof, and it is not in the score or the signal.

Related terms

Related lessons

Educational content only, not investment advice. Companies and figures in the examples are invented for illustration.