Smart Money & ICT
The vocabulary of Smart Money Concepts and ICT, which reads charts through liquidity and imbalance. These terms explain where stops rest, how they get taken, the zones traders enter from and the models that put the pieces together.
37
terms in this topic
12
with a chart or figure
37
taught in an Academy lesson
12
other topics
37 terms, A to Z
- 13intermediate
- 24advanced
- Balanced price rangeBPRThe overlap of a bullish and a bearish fair value gap, where price moved fast both ways.
- Breaker blockAn order block that failed after a liquidity sweep and flipped: a broken bearish block becomes bullish support.
- Buy-side liquidityBSLBuy orders resting above highs: short sellers' stop-losses and breakout traders' buy stops.
- Consequent encroachmentCEThe 50% level of a fair value gap (or of a long wick); healthy gaps tend to hold it.
- Dealing rangeThe range between the swing low and swing high of the current leg, usually the one that broke structure.
- DisplacementA fast, large-bodied move with little wick that shows intent, breaks structure and leaves fair value gaps.
- Draw on liquidityDOLThe pool of liquidity or imbalance price is most likely heading for next, which sets your bias.
- Equal highs and lowsTwo or more highs (or lows) at almost the same price: an obvious pool of stops that tends to get taken.
- External range liquidityERLLiquidity beyond the range's swing highs and lows (ERL), as opposed to internal liquidity like fair value gaps inside it (IRL).
- Fair value gapFVGA three-candle gap where candle 1's wick and candle 3's wick don't overlap, left by a fast move.
- ICTThe trader whose teachings popularised fair value gaps, killzones, Power of 3, OTE and many other SMC terms.
- InducementAn early, obvious level in front of the real point of interest that lures traders in too soon.
- Inverse fair value gapIFVGA fair value gap that price closed straight through; it flips and acts in the opposite direction.
- Judas swingThe early false move of the session, against the day's real direction, that runs stops before reversing.
- LiquidityIn SMC, the pools of resting orders, especially stop-losses, that sit beyond obvious highs and lows.
- Liquidity sweepPrice wicking through an obvious high or low to take the stops, then closing back inside and reversing.
- Liquidity voidA stretch price crossed so fast and one-sidedly that little trading happened there; often revisited later.
- Market maker modelICT's big-picture cycle: consolidation, a stair-step move one way, a reversal at a key level, and a stair-step return.
- Mean thresholdThe 50% level of an order block's body.
- Mitigation blockLike a breaker, a failed order block that flips, but formed without a liquidity sweep.
- MSS and FVG entrySweep liquidity, displace into a structure shift, then enter on the retrace into the fair value gap it left.
- Optimal trade entryOTEICT's entry zone between the 62% and 79% retracement of a leg, with 70.5% as the sweet spot.
- Order blockOBThe last opposite-coloured candle before a displacement that breaks structure; price often reacts when it returns.
- Point of interestPOIAny zone you might trade from: a fair value gap, order block, breaker and so on.
- Power of 3ICT's idea that a candle forms in three phases: accumulation, manipulation (a false move) and distribution (the real move).
- Premium and discountAbove the 50% (equilibrium) of the dealing range is premium, below it is discount: buy in discount, sell in premium.
- Rejection blockThe long wick at a swing point, from the wick's extreme to the body; a propulsion block is an order block formed on top of an older one.
- Sell-side liquiditySSLSell orders resting below lows: long traders' stop-losses and breakdown sell stops.
- Silver BulletICT's one-hour model: an FVG entry toward the draw on liquidity inside 3-4 am, 10-11 am or 2-3 pm New York time.
- Smart Money ConceptsSMCA framework that reads charts through liquidity, imbalances and the footprints of large traders.
- SMT divergenceCorrelated markets disagreeing at a key level, for example NQ making a lower low while ES doesn't.
- Stop huntA move that runs the stops clustered at an obvious level before price turns.
- Trendline liquidityThe row of stops that builds up just beyond a clean, many-touch trendline.
- Turtle soupFading a failed run above an obvious high (or below a low) once price fails back inside and shifts structure.
- Unicorn modelA breaker block overlapping a same-direction fair value gap; the overlap is the entry zone.
- Volume imbalanceVIA gap between two neighbouring candles' bodies while their wicks still overlap.
- Wyckoff methodRichard Wyckoff's early 1900s model of accumulation and distribution ranges; his spring is SMC's liquidity sweep.