# ICT SMT Divergence: Correlated Pairs Explained · DT Academy > ICT SMT divergence: when correlated markets disagree at the same swing. EURUSD and GBPUSD, ES and NQ, and why it confirms rather than triggers. [Back to ICT Concepts](https://www.thedtterminal.com/academy/courses/ict-concepts) Lesson 12SMT divergence Chapters done # SMT divergence Lesson 12 · 4 min read · By DT Terminal Use a correlated market as a second opinion at a swing that already matters, never as an entry trigger. Unlock the full lesson in the app Worked examples, the quiz and the interactive tools are in the app. Free account. [Continue in the app, free](https://www.thedtterminal.com/login?signup=true&redirect=%2Fjournal%2Facademy%2Fict-smt-divergence) Chapter 1 of 7 ## Two markets, one swing Some markets usually move together: `EURUSD` and `GBPUSD`, or the S&P 500 and Nasdaq 100 futures (`ES` and `NQ`). **SMT divergence**, which ICT expands as "smart money technique", is when two of them **disagree at the same swing**. - **Bullish SMT**, at lows: one market makes a lower low, the other makes a higher low. - **Bearish SMT**, at highs: one market makes a higher high, the other a lower high. ICT reads the new extreme as a stop run, a sweep in the sense of [Liquidity the ICT way](https://www.thedtterminal.com/academy/ict-liquidity), not a move the whole group made. What you can check is simpler: **which market took its old swing** and which did not. Chapter 2 of 7 ## Which markets to pair Pair markets that **share a driver**, and compare the same swing on the same timeframe and the same bars. | Pair | Why they move together | How to compare | | --- | --- | --- | | `EURUSD` and `GBPUSD` | Both priced against the US dollar | Same direction: lows with lows | | `EURUSD` and `DXY` | DXY is the dollar index | **Inverse**: a EURUSD low against a DXY high | | `ES`, `NQ` and `YM` | US stock index futures | Same direction: highs with highs | On a CFD account the index pair usually appears as US500 and NAS100. Line the two charts up on the same timeframe and the same clock, and mark the swing on each before you compare. Decide how far apart two swings may print and still count as the same one, say **2 bars**, and write that down too. Otherwise you will **find an SMT on every chart** you look at. **Check the correlation first.** **Correlations change.** Two markets that moved together last year may not this month, and an SMT between markets that no longer move together means nothing. Chapter 3 of 7 ## Bullish and bearish SMT Read each pair of cells side by side. Same bars, same swing. The top row disagrees; the bottom row agrees, and that is **most days**. SMT divergence ### Two correlated markets at the same swing - The old swing Bullish SMT, at lows Bearish SMT, at highs EURUSD takes the old low GBPUSD holds above it US500 takes the old high NAS100 holds below it SMT one market takes the old extreme, the other does not No SMT both take it together **The bearish pair is the bullish pair upside down.** A lower low against a higher low at the lows becomes a higher high against a lower high at the highs. Schematic candles, not market data. Chapter 4 of 7 ## SMT on the chart: at the lows A sample case, with both markets stacked over the same bars, New York time. Worked example ### Example 01: `EURUSD` and `GBPUSD` M15: a bullish SMT at the lows The worked example, with every number walked through, is in the app. [Continue in the app, free](https://www.thedtterminal.com/login?signup=true&redirect=%2Fjournal%2Facademy%2Fict-smt-divergence%3Fsection%3Don-the-chart%23on-the-chart) Free account Chapter 5 of 7 ## SMT on the chart: at the highs The bearish version, on a sample index pair, New York time. Worked example ### Example 02: `US500` and `NAS100` M5: a bearish SMT at the highs The worked example, with every number walked through, is in the app. [Continue in the app, free](https://www.thedtterminal.com/login?signup=true&redirect=%2Fjournal%2Facademy%2Fict-smt-divergence%3Fsection%3Dat-the-highs%23at-the-highs) Free account Chapter 6 of 7 ## A second opinion, not a trigger Correlated markets drift apart briefly all the time. On its own an SMT is common and cheap, so **the mistake is to trade every one**. Treat it as a **confirmation layer** at a level and a time that already matter: a known pool of liquidity, inside a window you trade. Written as a rule: at a marked old low, inside your session window, **the second market must hold** above its matching low **on the same bar**. If your model has no level and no window yet, **build those first**. Chapter 7 of 7 ## Test whether SMT adds anything Before SMT goes into your rules, measure it on your own markets: **record every case, then compare**. Replay both markets in one backtester session Add `EURUSD` and `GBPUSD` to the same backtester session and replay a month on `M15`. Each time one pair takes a marked low, **check the other on the same bar** and write SMT or no SMT before you play on. Tag it, then compare Tag trades where an SMT was present with `SMT`. After a few dozen, **filter the Trade Log by the tag** and compare those trades with the rest of the same setup, in R. Quick review ## Check yourself Quick review · 0 of 0 [All lessons in ICT Concepts](https://www.thedtterminal.com/academy/courses/ict-concepts) [Previous](https://www.thedtterminal.com/academy/ict-turtle-soup) ## Turtle soup: fading a liquidity sweep Lesson 11 · 6 min read [Next in ICT Concepts](https://www.thedtterminal.com/academy/ict-silver-bullet) ## The Silver Bullet Lesson 13 · 5 min read ## Try it on your own account Connect a broker and DT Terminal verifies every trade against it. Free to start. [Start free](https://www.thedtterminal.com/login?signup=true&from=academy&entry=closing_card&redirect=%2Fjournal%2Facademy) [Back to DT Academy](https://www.thedtterminal.com/academy) DT Academy is education, not financial advice. Nothing here is a recommendation to buy or sell any instrument. Trading carries a high risk of losing money, and past results, examples and backtests do not guarantee future results. 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