ICT Trading

What is ICT Trading?

ICT Trading refers to a trading methodology known under the name Inner Circle Trader. It is centred on analysing market structure, liquidity, institutional price areas, trading times, and recurring movement patterns in the chart.

The approach tries to explain why price targets certain highs, lows, or inefficient price areas, and how traders can classify these movements systematically.

ICT Trading is neither a single entry rule nor an automated trading system. It is an analytical model designed to help traders read price movements more systematically and better prepare their own trading decisions.

Who developed the ICT methodology?

The ICT methodology is primarily associated with US trader and trading educator Michael J. Huddleston, known under the name The Inner Circle Trader.

Over many years, Huddleston published extensive content on market structure, liquidity, Fair Value Gaps, Order Blocks, Killzones, Daily Bias, and further concepts.

Many terms used today in the Smart Money Concepts space overlap with ICT concepts or were widely spread by the ICT community.

Importantly: ICT is not a state-certified, scientifically standardised, or officially regulated trading method. It is a discretionary analytical model interpreted and applied differently by traders.

Core idea of the strategy

The core idea of ICT Trading is not to view price movements as random, but as movement between liquidity areas.

Liquidity is often expected above old highs and below old lows. Stop-Loss orders, breakout orders, or other market orders can reside there.

ICT traders therefore try to identify which liquidity the market is likely to target, and from which price areas a reaction might subsequently emerge.

The focus is not only on whether the market rises or falls, but also on when and where a movement could meaningfully occur.

Key concepts

ICT analysis principles

ICT Macros

ICT Macros are short, predefined time windows within a trading session. Many ICT traders observe these windows because, according to ICT teaching, certain price movements may occur more frequently within them.

A Macro is not a complete strategy, however. It serves more as a timing filter. The trader checks whether the market is at a relevant zone during such a window, whether liquidity is nearby, and whether market structure fits the planned setup.

Typical observations within such time windows include liquidity grabs, reactions from Fair Value Gaps, repricing moves, or continuations of a previous impulse.

Since many ICT times reference New York time, summer time, winter time, and the time zone of one's own chart server must be checked carefully. An incorrect time zone can cause a trader to mark the wrong trading windows.

Power of 3

A well-known ICT model is the so-called Power of 3. It views a market move in three phases:

This model is no guarantee. It is a mental model for better categorising certain intraday movements.

Sessions and Killzones

ICT traders frequently pay attention to specific trading times. Most important are usually the London Session, the New York open, and certain time windows within the New York session.

The idea: during these times market activity often increases because large participants are active and important liquidity areas can be targeted.

A killzone is not an automatic buy or sell signal. It is merely a time window in which a trader checks especially carefully whether their setup is forming.

Typical ICT analysis workflow

1. The higher timeframe is checked first.
2. Important highs, lows, liquidity areas, and inefficient price areas are marked.
3. A possible market direction or a so-called Daily Bias is formulated.
4. It is checked which trading time or session is relevant.
5. The trader waits for a reaction at a meaningful zone.
6. Only then are entry, stop-loss, target area, and risk defined.
7. After the trade, it is documented whether the setup was rule-compliant.

Why journaling matters

ICT Trading can quickly feel complex for beginners because many concepts play a role simultaneously. Without clean documentation, it is difficult to tell whether a trader is genuinely trading a model or merely finding post-hoc explanations for market moves.

A trading journal should contain at minimum screenshots, date, time, market, timeframe, bias, liquidity target, entry reason, stop-loss, target, result, and mistakes.

Only through consistent journaling can a trader check whether a setup is repeatable and whether their own execution actually provides an edge.

Known figures and reference points

The most important reference point is Michael J. Huddleston, known under the name The Inner Circle Trader.

Beyond that, there are numerous community traders, YouTube channels, mentors, and tool providers who explain, simplify, or combine ICT concepts with their own approaches.

Beginners should carefully distinguish between original content, community interpretations, and commercial offerings from third parties.

Well-known reference points for further research include the official YouTube channel of The Inner Circle Trader, as well as community explanations of Smart Money Concepts, Fair Value Gaps, Killzones, and ICT Macros.

How beginners can learn effectively

For beginners it makes sense to first learn only a few core concepts: market structure, liquidity, Fair Value Gaps, Order Blocks, and Killzones.

Afterwards, a single setup should be selected and tested cleanly. Using too many ICT concepts simultaneously quickly causes loss of overview.

A clear learning process is advisable:

1. Understand the concept
2. Mark historical examples
3. Formulate rules
4. Conduct backtesting
5. Document demo trades
6. Only then work with real risk

Common mistakes

Further resources