How ICT traders read the market

How ICT traders read the market

Reading the market through the ICT lens means seeing price in terms of where liquidity resides and how Smart Money interacts with it. It’s not just support and resistance—it’s understanding why price reacts at specific points and predicting the manipulation that often precedes big moves. This includes combining time-based analysis with structural insight to identify high-probability entries and exits.

Key ICT concepts in depth

ICT traders use a combination of refined tools to decode price. These aren’t generic indicators, but contextual clues that reveal market intent:

• Order Blocks: The last bearish/ bullish candle before a reversal. These mark institutional entry points and act as powerful support/resistance zones.

• Fair Value Gaps (FVGs): Gaps between candles that reflect inefficiencies in price. Price often returns to these zones before resuming direction.

• Liquidity Pools: Clusters of pending orders like stop-losses. Price seeks these areas before making a true move.

• Optimal Trade Entry (OTE): Fibonacci-based entry zone in line with directional bias and liquidity sweep.

• Breaker Blocks: Former support/resistance zones that flip roles once price breaks and retests them.

The ICT daily framework

ICT traders work within a clear intraday structure. They break the trading day into three sessions: Asian (accumulation), London (manipulation), and New York (distribution). Each session serves a purpose. The real setups often come during the New York session after price has cleared liquidity in London.

• Asian session builds the daily range and bias

• London session creates false moves and traps

• New York session delivers the actual move

This approach helps ICT traders avoid overtrading and false entries. Instead of reacting to price, they let price reach predefined kill zones before engaging. Patience and context are essential pillars of this method.

Trading with confluence

Confluence is everything in ICT. Traders stack multiple elements—such as FVGs, order blocks, and liquidity grabs—alongside session timing to build high-probability setups. For example, if price sweeps the previous day’s high during London, enters a FVG within an order block, and then prints a reversal pattern during NY kill zone, the trade idea is validated.

• Bias from higher timeframes

• Entry from 1M–5M confluence

• Target: opposing liquidity or FVG fill

• Risk: tight, defined under structure

This rule-based style eliminates guessing. You're not hoping for price to move—you’re anticipating how Smart Money will move it.

What is the ICT method?

What is the ICT method?

The Inner Circle Trader (ICT) method is a price action-based trading system that mirrors the behavior of institutional market participants. Developed by Michael J. Huddleston, ICT teaches traders to identify where large volumes of liquidity exist, how Smart Money manipulates price to fill orders, and how to position on the correct side of the move. It’s a complete paradigm shift from typical retail strategies that rely on indicators, trendlines, or candlestick patterns alone.

ICT centers on the idea that markets are engineered for liquidity collection. Price doesn't move randomly—it moves toward zones where orders are clustered, such as stop-losses, pending entries, and psychological levels. By studying the behavior of price around these zones, ICT traders gain insight into the motives behind each movement.

Core beliefs behind ICT

ICT is grounded in institutional trading behavior. It rejects the randomness of traditional price theories and focuses instead on cause-and-effect dynamics driven by liquidity and order flow. Michael Huddleston often refers to the “three phases” of Smart Money execution: accumulation, manipulation, and distribution.

• Accumulation: Building positions in tight ranges before the move

• Manipulation: Running stops or inducing fake moves to create liquidity

• Distribution: Moving price aggressively in the intended direction

This sequence plays out in every timeframe. Whether you’re scalping or swing trading, the ICT method applies because it's based on price behavior and human psychology—both of which are consistent across market environments.

What makes ICT unique

What sets ICT apart is its focus on teaching traders to think in probabilities, timing, and intention. Unlike lagging indicators, ICT is proactive. You learn to anticipate moves based on liquidity profiles, session timing, and institutional bias. The method doesn’t promise magic—it builds discipline through logic and evidence-based setups.

• ICT teaches institutional timing, not reaction

• It’s a rule-based system built on market structure

• Tools are drawn from real-time price action, not indicators

• It’s adaptable across Forex, indices, crypto, and more

Learning ICT isn’t about being right every time—it’s about having a repeatable edge based on how the markets truly function under the surface.