What "smart money" can and cannot mean
This topic attracts more mysticism than any other in retail trading. Before the useful part, be clear about what is and is not knowable.
Not knowable from a retail chart: who is buying, how large they are, what their intent is, or whether a specific move was "engineered." In decentralised spot FX there is no consolidated tape and no order book you can see. Anyone who tells you a candle shows an institution accumulating is inferring, not observing.
Knowable: where resting orders are likely to be clustered, because stops go in predictable places. That is a structural fact about how people trade, not a claim about anyone's intent.
Everything worth using in this lesson sits in the second category.
The mechanism, without the story
A participant needing to buy in size cannot fill where nobody is selling. They need clustered sell orders. Below an obvious swing low sits a cluster of stops from everyone long — and stops to sell are exactly the supply required.
So price frequently trades through obvious levels before reversing. Not because anyone targeted you, but because that is where the transactions could happen.