SMC / ICT Glossary
All Smart Money Concepts and ICT terms explained clearly
Structure (4)
Break of Structure (BOS)
Trend continuation confirmation that occurs when price breaks a previous high or low in the direction of the dominant trend.
Change of Character (CHoCH)
The first signal of a potential trend reversal. Occurs when price breaks a swing high or low against the dominant trend direction.
Market Structure
The foundational price pattern defined by the sequence of swing highs and swing lows that determines the current trend and directional bias.
Order Block (OB)
A price zone where institutions placed aggressive orders before an impulsive move. It is the last opposing candle before a strong displacement.
Zones (4)
Breaker Block
A failed Order Block that was broken through by price and now acts as a support or resistance zone in the opposite direction. It signals a trend reversal.
Fair Value Gap (FVG)
A price imbalance created by an impulsive move where no fair exchange occurred between buyers and sellers. Identified as a gap between three consecutive candles.
Mitigation Block
A price zone where institutions close losing positions before initiating a new move. Acts as a reaction point after a trend reversal.
Premium and Discount Zones
Division of a price range into high-value (premium) and low-value (discount) zones using the 50% level as equilibrium to determine optimal entries.
Concepts (6)
Displacement
An aggressive, rapid price move formed by consecutive large-bodied candles that indicates strong, intentional institutional activity.
Equal Highs / Equal Lows
Price levels where two or more swing highs or lows form at the same level, creating a massive pool of liquidity that Smart Money will seek to sweep.
Inducement (IDM)
Minor liquidity intentionally created within a pullback to lure retail traders into premature entries before price reaches the real Smart Money zone of interest.
Liquidity Sweep
An intentional price move to trigger stop losses and pending orders accumulated at obvious levels before reversing in the real Smart Money direction.
Optimal Trade Entry (OTE)
The optimal entry zone identified by ICT between the 61.8% and 79% Fibonacci retracement of an impulsive move, where the risk-to-reward ratio is maximized.
Smart Money Concepts (SMC)
A trading methodology based on understanding how financial institutions operate, identifying their footprints in price action to trade in the same direction.
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