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Smart money index or smart money flow index is a technical analysis indicator demonstrating investors' sentiment. The index was invented and popularized by money manager Don Hays. The indicator is based on intra-day price patterns.
The main idea is that the majority of traders overreact at the beginning of the trading day because of the overnight news and economic data. There is also much buying on market orders and short covering at the opening. Therefore, the basic strategy is to bet against the morning price trend and bet with the evening price trend. The SMI may be calculated for many markets and market indices
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