Most Important ICT Concepts to Conquer the Market — Complete List

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ICT concepts are the trading techniques introduced by Michael Huddleston, also known as the Inner Circle Trader.

These concepts are based on the Interbank Price Delivery Algorithm (IPDA) which delivers price online.

By mastering these ICT concepts you can make your trades more successful.

This guide covers the basic understanding of each concept on a single page — to read any one of them in full, follow the link inside the section to the dedicated tutorial.

Liquidity

Liquidity is the base of price movement and the ICT concepts.

As ICT mentioned, price moves because of two main reasons — and one of them is liquidity.

Liquidity refers to the stop-loss orders and the pending buy or sell orders of market participants.

Liquidity is divided into two types: buy-side liquidity and sell-side liquidity.

Buy-side liquidity refers to the stop-loss orders of sellers and the buy-stop orders of waiting buyers.

Sell-side liquidity refers to the stop-loss orders of buyers and the sell-stop orders of waiting sellers.

On a price chart, liquidity resides at the crucial levels — strong support and resistance areas, relative equal highs and lows, or psychological price levels.

You can see the example of liquidity indicated on the price chart in the picture given below.

Smart Money Concepts state that smart money knows about these levels of liquidity and tries to hunt the liquidity of retailers before moving price in their favor. ICT traders follow the footprints of smart money and make profits.

For the detailed study about liquidity, see my dedicated Liquidity in Forex Trading guide.

Imbalance (Fair Value Gap)

Imbalance is the 2nd reason for price movement on the chart and is one of the bases of ICT concepts.

Imbalance refers to the disparity between buying and selling forces.

An imbalance is indicated by the ICT Fair Value Gap, which is a three-candle formation with a gap between the 1st and 3rd candle that remains unmitigated.

Price often refers back to these areas for the fair value, and these areas act as support or resistance for price.

You can see the example of a fair value gap in the picture below.

For the complete study about fair value gaps, see my dedicated Fair Value Gap Trading Strategy guide.

Displacement

Displacement refers to a strong price movement showing high momentum, indicated by the large-bodied candlesticks with fair value gaps in between them.

Displacement happens when price reacts aggressively to a certain price level.

You can see the example of displacement in the picture given below.

For the complete study about displacement, see my dedicated ICT Displacement Move guide.

Market Structure Shift (MSS)

Market structure shift is the initial change in the direction of price which can lead to a reversal.

It is indicated by the break of a swing high in a bullish scenario and the break of a swing low in a bearish scenario.

You can use market structure shift as a confirmation of your trade entry.

An example of market structure shift is given below.

For the complete study about ICT market structure shift, see my dedicated ICT Market Structure Shift guide.

Break of Structure (BOS)

Break of structure is the first major confirmation that the trend is continuing — a clean break above the previous swing high (bullish) or below the previous swing low (bearish).

BOS confirms the leg and lets you mark the inducement, the order flow and the order block inside that leg.

For the complete study, see my dedicated Break of Structure (BOS) guide.

Change of Character (CHOCH)

Change of character is the first sign that the trend is reversing — the break of the most recent counter-trend swing point in the opposite direction.

In a bullish leg, CHOCH is the break of the most recent higher low to the downside. In a bearish leg, CHOCH is the break of the most recent lower high to the upside.

For the complete study, see my dedicated Change of Character (CHOCH) guide.

Order Block

Order block is the area on the price chart where a cluster of buy or sell orders is placed by institutions.

An impulse price movement after the order block adds to its validity.

Bearish order block is indicated by the last bullish candlestick before an impulse bearish price move.

Bullish order block is indicated by the last bearish candlestick before an impulse bullish price move.

You can see the example of an order block in the picture given below.

For the complete study about order blocks, see my dedicated ICT Order Block guide.

Inducement (IDM)

Inducement is a key level or market structure that persuades a FOMO retail trader to execute a trade early — a smart-money trap.

Price typically sweeps the inducement before delivering the real directional move, leaving the retail trader stopped out.

For the complete study, see my dedicated Inducement in Forex guide.

Daily Bias

Daily bias is the anticipated potential direction of price for the day.

Daily bias is an important ICT concept for day traders.

ICT traders use the daily chart and the lower timeframes to anticipate the price direction and then trade in that direction.

You can see the example of daily bias in the picture given below.

For the complete study about daily bias, see my dedicated ICT Daily Bias guide.

Premium and Discount Zones

Premium and discount zones are the key to trading with ICT concepts, and the Fibonacci retracement tool is used to find these zones.

Apply Fibonacci from a swing high to swing low with the inputs 0, 1 and 0.50.

The area above 0.50 is the premium zone, and the area below 0.50 is the discount zone.

The idea behind premium and discount is that a seller prefers to sell at premium and a buyer prefers to buy at discount.

You can see the example of premium and discount zones in the picture below.

For the complete study about the premium and discount zone, see my dedicated Premium and Discount Zone guide.

Optimal Trade Entry (OTE)

The Optimal Trade Entry is the 62%–79% Fibonacci retracement zone of the most recent impulsive leg — the area where smart money typically delivers the real move after sweeping the inducement.

For the complete study, see my dedicated ICT Optimal Trade Entry guide.

Power of 3 (PO3 / AMD)

Power of 3 is the daily delivery template — Accumulation, Manipulation, Distribution. Smart money accumulates inside the Asian range, manipulates one side during London, and distributes the real move during New York.

For the complete study, see my dedicated ICT Power of 3 guide.

Silver Bullet

Silver Bullet is a one-hour high-probability window during the New York AM session (10:00–11:00 NY) where price typically delivers a fair value gap entry in the direction of the daily bias.

For the complete study, see my dedicated ICT Silver Bullet guide.

Killzones

Killzones are the specific time windows where institutional volume concentrates — Asian killzone, London killzone, New York AM killzone and New York PM killzone. Trading inside the killzones gives the highest-probability ICT setups.

ICT Macros

ICT Macros are the 20-minute high-conviction windows inside each killzone — for example the 09:50 NY-AM macro and the 13:10 NY-PM macro — where the algorithmic delivery is most concentrated.

For the complete study, see my dedicated ICT Macro Time-Based Strategy guide.

Smart Money Reversal (SMT) Divergence

SMT divergence is the disagreement between two correlated pairs at a key liquidity level — for example EUR/USD making a higher high while GBP/USD makes a lower high. SMT confirms that smart money is rejecting the level.

For the complete study, see my dedicated ICT SMT Divergence guide.

Turtle Soup

Turtle Soup is the failure pattern at relative equal highs or lows — price sweeps the equal level, fails to follow through, and reverses. It is one of the cleanest ICT entries against retail breakout traders.

For the complete study, see my dedicated ICT Turtle Soup guide.

Judas Swing

Judas Swing is the false move at the London open that fakes the retail trader into the wrong direction before the real London move begins. It is a manipulation phase of the daily Power of 3 template.

For the complete study, see my dedicated ICT Judas Swing guide.

IRL and ERL

Internal Range Liquidity (IRL) is the liquidity inside a dealing range — typically the FVGs and order blocks. External Range Liquidity (ERL) is the liquidity outside the dealing range — the swing highs and lows. Price oscillates between IRL and ERL.

For the complete study, see my dedicated IRL and ERL guide.

How to Use This List

The order in which you should learn these concepts:

1. Liquidity, Imbalance, Displacement — the three forces that drive price.
2. BOS and CHOCH — the structural read.
3. MSS — the lower-timeframe entry trigger.
4. Order Block, FVG, Inducement — the PD arrays.
5. Premium and Discount, OTE — the entry refinement.
6. Daily Bias, Power of 3 — the directional and time framework.
7. Killzones, Silver Bullet, Macros, Judas Swing — the time-based delivery windows.
8. SMT, Turtle Soup, IRL/ERL — the advanced confluences.

Each concept builds on the previous one, so following the order above gives you the cleanest learning curve.

FAQs about ICT Concepts

Brief answers to the questions readers ask most often about the ICT concepts list.

Who created the ICT concepts?

Michael J. Huddleston, also known as the Inner Circle Trader. The ICT framework is built on the Interbank Price Delivery Algorithm and Smart Money Concepts.

What are the most important ICT concepts?

Liquidity, Imbalance (FVG), Displacement, Market Structure Shift, Order Block, Inducement, Daily Bias, Premium and Discount, OTE, Power of 3, BOS and CHOCH. These are the foundation of every ICT trade.

In which order should I learn them?

Liquidity, Imbalance, Displacement first — then structure (BOS, CHOCH, MSS) — then PD arrays (OB, FVG, Inducement) — then entry refinement (Premium/Discount, OTE) — then time-based delivery (Daily Bias, Power of 3, Killzones, Silver Bullet).

Are ICT concepts the same as SMC?

ICT and SMC overlap heavily — both are built on liquidity, imbalance and structure. SMC is essentially a derivative of ICT that some traders teach separately, but the mechanics are the same.

Do these concepts work on indices and gold?

Yes — ICT concepts apply cleanly to NQ, ES, XAU/USD and major forex pairs. The algorithmic delivery is consistent across asset classes.

Where can I find the complete tutorial for each concept?

Every section above has a link to the dedicated tutorial on this site. Click the section’s link to read the full breakdown — definition, types, identification, trade flow, common mistakes and FAQ.

How long does it take to master ICT?

Three to six months of focused study and chart time on a single instrument is the realistic learning curve for the core concepts. The advanced concepts (SMT, Power of 3, Macros) take longer.

What timeframes do ICT traders use?

Daily and 4-hour for the bias, 15-minute for the analysis, and 5-minute or 1-minute for the execution.