ICT Methodology is a framework used by many traders to understand how price moves in modern financial markets. It focuses on how large institutions—such as banks, funds, and liquidity providers—interact with price levels. Instead of relying on indicators, ICT emphasizes reading raw price action and recognizing areas where liquidity is concentrated.
The methodology teaches traders to analyze market structure, including highs, lows, trend shifts, and consolidation zones. It also highlights concepts such as liquidity pools, fair value gaps (FVGs), displacement, order blocks, and imbalances. These elements help traders understand where price may seek orders, rebalance inefficiencies, or set up potential reversals.
ICT is widely used in Forex, index futures, and crypto trading. Many traders appreciate the clear structure and rule-based approach. However, like any trading method, it requires practice, chart study, and risk management to use effectively.
ICT Methodology gives traders a structured way to interpret price behavior without relying on indicators. It helps traders understand liquidity, volatility, and institutional influence—key factors in active trading.
ICT focuses on several key ideas: liquidity pools (areas where stop orders cluster), market structure shifts, fair value gaps (imbalances created by fast price moves), and order blocks (zones linked to institutional activity). Traders use these concepts together to identify where price may move next. ICT also includes timing tools, such as optimal trade entries during specific sessions.
Traders mark areas where liquidity is likely to be taken—such as previous highs or lows—and wait for price reactions. They also identify fair value gaps and order blocks to anticipate entries or exits. Many ICT traders combine these tools with session timing, such as London open or New York open, to find higher-probability setups. The approach is rules-based and focuses on patience and precision.
Liquidity shows where large numbers of orders are sitting. When price moves toward these areas, it often signals institutional activity or a shift in market direction. ICT methodology teaches that markets “seek liquidity” before continuing or reversing trends. Understanding this behavior helps traders avoid common traps and time entries more effectively.
A trader identifies equal highs on a chart—an area where many stop orders likely sit. When price moves above this level to capture liquidity and then returns inside the range, the trader looks for a fair value gap and an order block to confirm a potential reversal entry.
