ICT / Smart Money Concepts
How to read institutional footprints on charts. Order Block, Fair Value Gap, Liquidity Sweep — the tools market makers use to make billions.
Order Block
An Order Block is the last bearish candle before a strong bullish move (bullish OB) or the last bullish candle before a strong bearish move (bearish OB). It represents zones where institutions have placed massive orders.
Fair Value Gap (FVG)
A Fair Value Gap is a price gap created by an impulsive 3-candle move, where the central candle has a body not covered by the wicks of adjacent candles. Price tends to return to 'fill' the gap.
Liquidity
In the ICT model, liquidity is found where retail traders place their stop losses: above highs (buy-side liquidity) and below lows (sell-side liquidity). Institutions 'hunt' this liquidity to fill their orders.
OTE (Optimal Trade Entry)
The OTE is the ideal entry zone in the ICT model, located between 62% and 79% of the Fibonacci retracement of the last impulsive move. It's where institutions typically enter the market.
BOS (Break of Structure)
A Break of Structure occurs when price breaks a significant high or low in the trend direction, confirming the continuation of the current market structure.
ChoCH (Change of Character)
A Change of Character is the first signal of a potential trend reversal. It occurs when price breaks the structure in the opposite direction of the current trend for the first time.
Killzones
Killzones are specific time windows where volatility and volume are highest due to the opening of major sessions. They are the best times to trade according to the ICT model.
Breaker Block
A Breaker Block is an Order Block that has been violated and has reversed its role: a broken bullish OB becomes a resistance zone (bearish breaker), a broken bearish OB becomes a support zone (bullish breaker). It's one of the most reliable re-test zones in the ICT model.
Premium & Discount
The Premium/Discount concept divides a price range (between a swing high and a swing low) exactly in half via the 50% Fibonacci. Above 50% price is in 'Premium' (expensive, sell zone), below it's in 'Discount' (cheap, buy zone).
Judas Swing
The Judas Swing is the initial false move, typically at the open of the London or New York session, that pushes price in the wrong direction to collect liquidity before reversing into the true move of the day.
Power of Three (AMD)
The Power of Three describes the three phases that every trading session tends to follow according to the ICT model: Accumulation (range accumulation), Manipulation (false move/Judas Swing) and Distribution (the true directional move of the session).
Displacement
Displacement is an impulsive and aggressive price move, typically formed by one or more candles with wide range and strong close, indicating strong institutional intervention. Displacement is what creates Fair Value Gaps.
Select a topic below to read a complete and in-depth guide on each ICT concept. Each page contains detailed theory, operational signals, common mistakes and practical examples.