Yes, the COMPLETE “market making” process of the SM algos is fully automated. Yes, there are of course specific “thresholds” which determine certain action. For example, a large accumulation of positions (i.e. 400 on the scale) will influence which move is prioritized next. Yes, the SM manages to simultaneously “lure” in new DM traders as well as “killing” the current ones. I find that particular point very fascinating. But think about it through the “MK lense”; if DM longies enter “above” the upper H4 band for example, thinking that the “previous high is now broken and momentum will continue”, then the SM does an H4 reversal down, placing these longies into DD, this right after they just took the LTS of the older DM shorties from before (and who led the SM to push the market towards the upper band).
Yes, to the “outsider” all FX markets look like complete “chaos”. There are whipsaw moves, dirty trends, unclear support and resistance levels, plateaus, failed reversals, uneven pullbacks, mixed with strong trends, rather even consolidations etc.
In that sense, FX is “efficient”. However, the MK trader “sees” what is going on behind the curtain and understand the “causality”.
Also remember the “anti-learning principle”, the DM has no real chance to “learn” by simply watching the naked price action. Because once they see a “head and shoulders pattern” unfold, but the other time they see the EXACT same price action with the opposite outcome, this because the DM was literally on the opposite side this time. The SM algos DO TAKE into consideration what the current “occurrence” of such price patterns is and makes sure that all major ones approach a 50-50 probability. That is quite an interesting topic I have not elaborated on a lot, but it is not super complex neither.