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ICT Method

Inner Circle Trader (ICT) Method

What is ICT?

ICT (Inner Circle Trader) is a trading methodology developed by Michael Huddleston, focused on understanding smart money movements through price action analysis, market timing, and key levels.

Key ICT Components

Market Structure (MS)
  • Break of Structure (BOS): Breaking swing highs/lows
  • Change of Character (ChoCh): Shift in trend momentum
Order Blocks (OB)
  • Bullish OB: Accumulation area before a price rally
  • Bearish OB: Distribution area before a price drop
Liquidity Pools
  • Target: Areas of retail trader stop losses
  • Strategy: Entry before liquidity is swept

Advantages of ICT

  • No indicators — minimal lag
  • Understand institutional market psychology
  • Compatible with multi-timeframe analysis

Disadvantages of ICT

  • Subjective interpretation
  • Risk of misidentifying order blocks
  • Requires intensive practice

Case Study (EUR/USD M5)

Identify bearish OB during the London session
Wait for price to return to OB + lower high confirmation
Enter short with SL 10 pips, TP 30 pips
Result: Profit 3R (risk-reward 1:3)

ICT M5 Trading Tips

  • Focus on the London session (07:00–09:00 GMT)
  • Use volume profile for confirmation
  • Combine with FVG for precision entries
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