What is ICT? An overview of ICT concepts
Liquidity, imbalance and time: the three ideas behind the Inner Circle Trader’s concepts, in plain words, and the order to learn them in.
ICT trading is a way of reading price taught by the Inner Circle Trader (ICT), built on three ideas: price moves to take liquidity, it leaves imbalances behind when it moves fast, and it tends to do both at particular times of day. The Inner Circle Trader teaches it in lectures on YouTube and calls himself the creator of Smart Money Concepts.
This overview covers what ICT is, the three ideas everything rests on, the ten concepts in the order to learn them, and how they fit together on one chart.
What ICT is
ICT is the online name of Michael J. Huddleston, a trader and teacher who goes by the Inner Circle Trader (@I_Am_The_ICT, TheInnerCircleTrader.com). His YouTube channel dates from 2012 and holds hundreds of lectures, including the private mentorship he once charged for.
ICT claims the name Smart Money Concepts as his own. His channel introduces him as “The Author & Creator of ‘Smart Money Concepts’”, and says that most of what is marketed today as SMC, bank trading or interbank trading “sprouted right from the lectures and teachings I Authored”. His recent lecture series carry the SMC name in their titles.
The vocabulary in these guides is ICT’s, whatever you make of that claim. He teaches liquidity runs, fair value gaps, order blocks, killzones and the rest, and much of what is taught elsewhere as SMC reuses those ideas.
The three ideas everything rests on
The three ideas behind every ICT concept are liquidity, imbalance and time. The first two are ICT’s own summary: the big interbank traders, he says, read the market from “two unique perspectives, liquidity and imbalance, that’s it” 8:39.
- Liquidity. Traders leave orders resting above old highs and below old lows: stop losses, plus orders to buy a breakout or sell a breakdown. ICT calls the pool above the highs buyside liquidity and the pool below the lows sellside liquidity. Price is drawn to these pools, and often runs through one before a reversal.
- Imbalance. When price moves fast, it can leave a stretch that only traded in one direction. The best-known kind is the fair value gap. ICT expects price to come back to these gaps, and how it behaves when it does is the read.
- Time. ICT holds that the important moves come at particular times of day, read on the New York clock: “all of this occurs based on time and price” 58:58, as he put it in 2020. His set windows are called killzones. The London killzone, for example, runs from 02:00 to 05:00 New York time 2:43.
Every other concept in the ICT guides is a closer look at one of these three, or at how they combine.
The concepts, in learning order
Learn ICT in this order: market structure, then liquidity, then the gaps and zones built from them, and last, time and the daily read that ties them together. ICT’s own advice in 2020 was to begin with market structure (his lesson on it is described as “where your journey begins with ICT” video), so these guides do too. Liquidity comes second, because almost every later concept is read against it.
- 01 ICT Market Structure Swing highs and lows, and the market structure shift: a break made with force, after a run on stops.
- 02 ICT Liquidity Buyside and sellside liquidity, relative equal highs and lows, and the runs that take them.
- 03 ICT Fair Value Gap The three-candle gap a fast move leaves behind, and what price does when it comes back.
- 04 ICT ImbalancesComing soon The rest of the gap family: the volume imbalance, the liquidity void, the opening gaps, the inversion gap and the balanced price range.
- 05 ICT Premium and DiscountComing soon The dealing range and its 50% level, and why ICT looks to buy in the lower half and sell in the upper.
- 06 ICT Order BlockComing soon The candles a strong move starts from, as ICT defines them, which is more than “the last opposite candle”.
- 07 ICT Breaker and Mitigation BlocksComing soon What an order block becomes when it fails.
- 08 ICT KillzonesComing soon The windows of the New York day when ICT expects the important moves.
- 09 ICT Power of 3Coming soon Accumulation, manipulation, distribution: the shape of a day, and the false move ICT calls the Judas swing.
- 10 ICT Daily Bias and Draw on LiquidityComing soon Putting it together: where price is most likely heading next, and when to stand aside.
You do not need all of ICT. He says so himself: “not everything that I have ever taught is required” 0:45 (2025). These ten are the foundations his models are built from.
How the pieces fit on one chart
On one chart, ICT’s concepts follow a sequence: a quiet range, a run on stops, a shift in structure, a gap, a retrace into it, then the move to the draw on liquidity. The chart below marks eight of the ten concepts on one illustrative morning, numbered to match the guides.
The Asian session builds a quiet range with two near-equal highs, the accumulation of the Power of 3 (9). Buy stops collect above those highs (2). In the London killzone (8), price runs above them and fails to hold: the false move. A strong drop follows and breaks the last short-term low, a market structure shift (1), and leaves a fair value gap behind it (3). Price drifts back up into that gap, which sits in the premium half of the new range (5), just under the up-close candles the drop began from, the order block (6). From there it falls to the old low below, the draw on liquidity the morning was heading for (10).
The morning above shows one way ICT’s pieces combine, not a fixed recipe. Guides 04 and 07 are not drawn because they are variations on 03 and 06, and guide 10 covers when ICT would leave a day alone.
ICT vs SMC (Smart Money Concepts)
ICT and SMC are mostly the same ideas under two labels. ICT calls himself the creator of Smart Money Concepts and uses the name himself, and much of what is taught under the SMC label elsewhere reuses his ideas, sometimes under new names. A few popular SMC words are not his at all; the table translates.
| The idea | Common SMC word | ICT’s word | Guide |
|---|---|---|---|
| The trend carries on past a swing | BOS (break of structure) | No separate term (his “market structure break” means a bigger move) | ICT Market Structure |
| The trend reverses | CHoCH (change of character) | Market structure shift (MSS): a break made with force, after a run on stops | ICT Market Structure |
| Orders resting above highs and below lows | Liquidity, equal highs and lows | Buyside and sellside liquidity, relative equal highs and lows | ICT Liquidity |
| Price takes those orders | Liquidity sweep or grab | Run, raid, stop run, stop hunt or purge (sweep too, now and then) | ICT Liquidity |
| A one-way gap between candles | Imbalance, FVG | Fair value gap; imbalance is the wider family | ICT Fair Value Gap |
| The cheap or dear half of a range | Premium and discount | Premium, discount and equilibrium, inside a dealing range | ICT Premium and Discount Coming soon |
| The zone a strong move starts from | Order block, supply or demand zone | Order block, which only counts if the move leaves an imbalance | ICT Order Block Coming soon |
| The time of day | Trading sessions | Killzones: set windows inside the sessions | ICT Killzones Coming soon |
| The expected direction | Bias | Daily bias, read from the draw on liquidity | ICT Daily Bias and Draw on Liquidity Coming soon |
| A trap move before the real one | Inducement | Not his term, though he says a false move “induces” traders | ICT Power of 3 Coming soon |
ICT did not invent every idea he teaches: accumulation and distribution, for example, are far older words in trading. What he did was connect the pieces into one way of reading price, and he rejects Wyckoff’s older method as an explanation of how prices move: “Wyckoff is not a factor in Banking or the delivery of currency prices” video, as he wrote in 2020.
Where to start on ICT’s YouTube channel
ICT’s lectures are public on his YouTube channel, including the 2016 and 2017 private mentorship he once sold. He says he made it public so that nobody needs to buy it from resellers 0:07.
ICT has named three different starting points over the years, compared below.
| Starting point | What ICT said | Suits |
|---|---|---|
| Essentials To ICT Market Structure (his 2020 lesson, below) | “This is where your journey begins with ICT.” video | A first lesson, and the same start as these guides |
| 2016 Core Content, Month 1, then Months 2 to 12, then the Charter content, his twelve price action models (his 2024 advice) | “that’s exactly where every private ICT student starts” 3:43, and “you don’t rush” | The full course he once sold, in his order |
| 2022 ICT Mentorship (his 2024 advice for traders of more than forex) | “a stripped down version of my concepts” 4:26, with “no advanced theories” | Index futures traders who want one model |
Our suggestion: read these guides first, so the words are familiar, then watch the 2022 Mentorship from the first episode. It is taught mainly on index futures, E-mini Nasdaq above all, the markets this site uses.
What ICT is not
- Not one strategy. It is a vocabulary for reading price. ICT has built many models on it, from the single model of his 2022 Mentorship to the twelve price action models of his Charter content, and two traders using the same words can take different trades.
- Not a proven mechanism. ICT describes price as delivered by an algorithm he calls the IPDA, the interbank price delivery algorithm, and insists “it is a real thing” 59:12. Treat it as his model of the market. You can learn the concepts as a way of reading a chart without accepting it.
From ICT to Quarterly Theory and Quarter Sequence
ICT leads to Quarterly Theory, and Quarterly Theory leads to Quarter Sequence: each keeps what came before and adds a closer reading of time.
Quarterly Theory is a framework built on ICT. Its creator, Trader Daye (@traderdaye), built it on ICT’s ideas, and in March 2023 he posted a question that sums up where it came from: “Ever wondered how ICT got the times of his killzones?” His answer divides the day into four six-hour sessions, splits each session into four 90-minute quarters, and finds the killzones in the second and third quarter of each. Quarterly Theory repeats that four-part clock at every timeframe, keeps the Power of 3, the Judas swing, killzones, fair value gaps, order blocks and SMT divergence, and adds a fourth phase, True Opens for every cycle, and divergence measured across consecutive quarters (SSMT).
Quarter Sequence is Quarterly Theory read in sequence: the moments when three or more nested cycles, such as the Daily, the 90-minute and the Micro, sit in the same quarter at once. That alignment is a chain. An SSMT that forms inside a live chain is a QS SMT, and direction comes from the True Opens, never from the chain.
| ICT | Quarterly Theory | Quarter Sequence | |
|---|---|---|---|
| What it reads | Liquidity, imbalance and time of day | Four quarters in every cycle, from the year down to the 22.5-minute Micro, on the 18:00 New York clock | The same quarter lined up on three or more cycles at once: a chain |
| Time | Killzones on the New York clock | The quarter you are in, and its True Open | Chains across nested cycles, such as the Daily, 90-minute and Micro |
| Divergence | SMT between correlated markets | SSMT across consecutive quarters | QS SMT: an SSMT inside a live chain |
| Start here | This overview | What is Quarterly Theory? | What is Quarter Sequence? |
Anyone who knows the ICT guides already speaks most of the language of both. What is Quarterly Theory? is the next step.
ICT concepts on YouTube: watch ICT teach it
The YouTube lectures below are where ICT teaches his concepts, and the ones this guide quotes. Each pill opens the video at the moment we quote.
Common questions
What does ICT stand for in trading?
Inner Circle Trader. It is the online name of the trader who teaches the method, and traders use it for the method itself. Outside trading, ICT usually means information and communication technology.
What is the difference between ICT and SMC?
ICT and SMC are mostly the same ideas under two labels. ICT calls himself the creator of Smart Money Concepts, and much of what is taught as SMC elsewhere reuses his ideas, sometimes under other names, and adds words he does not use, such as CHoCH, BOS and inducement.
Is ICT a trading strategy?
ICT is not a single strategy. It is a vocabulary for reading price, and he has built many models on it, from the single model of his 2022 Mentorship to the twelve price action models of his Charter content. Two traders using the same words can take different trades.
Where should a beginner start with ICT?
A beginner should start with market structure and liquidity, then the gaps, then time, which is the order of the ten ICT guides here. ICT’s own starting points have been his 2020 lesson Essentials To ICT Market Structure and, in 2024, Month 1 of his 2016 Core Content. You do not need everything he has taught.
Quarter Sequence provides charting tools and indicators, and teaches a framework - not financial advice, signals, or any promise of profit. Trading futures carries substantial risk of loss.