ICT Trading Glossary – Must-Know Terms for Beginners
Master the language of ICT trading! This ultimate ICT Trading Glossary explains 50+ key terms — from order blocks to fair value gaps — to help you trade smarter.
If you’ve been diving into ICT (Inner Circle Trader) or SMC (Smart Money Concepts), you’ve likely felt lost in a sea of new terms: OB, FVG, BOS, CHoCH… what do they even mean?
This glossary is your ultimate cheat sheet — designed for beginners, intermediate traders, and even seasoned pros looking to refresh their knowledge.
By the end of this guide, you’ll not only understand 50+ essential ICT & SMC terms but also know how to apply them directly to your charts.
Market Structure & Price Action – Core ICT Trading Concepts
Understanding market structure and price action is the backbone of ICT and SMC trading. Here are the essential terms you must master:
BOS (Break of Structure)
A confirmed shift in market structure, signaling that the existing trend is likely to continue. For example, a bullish BOS indicates buyers are still in control.
CHoCH (Change of Character)
An early warning sign of a potential reversal. When the market breaks a minor level against the trend, it often hints that the direction may soon flip.
MSS (Market Structure Shift)
A more significant structural change compared to CHoCH — often the precursor to a major trend reversal or new trend formation.
Swing High & Swing Low
These are the peaks and valleys on your chart. They act as liquidity magnets where traders place stop-losses — and where smart money loves to hunt!
HTF → LTF Alignment
Combining high timeframe (HTF) analysis (e.g., Daily, 4H) with low timeframe (LTF) execution (e.g., 15m, 5m). This top-down approach improves entry precision.
POI (Point of Interest)
A level marked in advance — order block, fair value gap, or imbalance zone — where you expect price to react.
Premium & Discount Zones
Think of price as a seesaw.
- Premium zone: Above equilibrium — ideal for selling.
- Discount zone: Below equilibrium — ideal for buying.
Retracement vs Impulse
Retracement = temporary pullback (healthy correction).
Impulse = strong move in trend direction (institutional activity).
Learning to spot the difference prevents early exits.
Range
A sideways market where price accumulates liquidity before a big move (often followed by a BOS).
Continuation Pattern
A brief consolidation or pullback that forms before the trend resumes — like a pause before the next sprint.
Liquidity Concepts – Mastering the Fuel of the Market
Liquidity is the lifeblood of price movement in both ICT and SMC trading. Understanding how it works helps you trade with the smart money instead of against it.
Liquidity Pool
A cluster of stop-losses or pending orders sitting at obvious highs or lows — prime hunting grounds for institutions.
Inducement
A fake-out move designed to lure retail traders into the wrong direction before the true move begins.
Stop Hunt
A sharp, quick sweep above or below key levels to grab liquidity — wiping out stop-losses before price reverses.
Buy Side Liquidity (BSL)
Stop orders resting above recent highs, often targeted in bullish setups before the market moves down.
Sell Side Liquidity (SSL)
Stop orders sitting below recent lows, frequently taken out before price pushes higher.
Equal Highs & Equal Lows
These “perfect double tops/bottoms” are a retail trader trap — institutions love to sweep them because everyone thinks they’re safe levels.
Liquidity Void
A thin area on the chart with little to no trading — price often travels through these zones rapidly.
Sweep
An intentional wick or spike designed to collect liquidity from both sides before the actual directional move.
Expansion
The powerful price movement that follows after liquidity has been collected.
Accumulation & Distribution
Phases where the market builds up liq
Smart Money Tools in ICT & SMC Trading
These are the core ICT and Smart Money Concepts tools that institutional traders use to engineer price movements. Understanding these tools gives traders an edge in Forex, Gold (XAUUSD), Indices, and Crypto.
Order Block (OB) – The Blueprint of Smart Money
An Order Block is the last opposing candle (bullish before a drop or bearish before a rise) where institutions place major orders. It forms the foundation of ICT and SMC setups and is often used to anticipate market reversals or continuations.
Fair Value Gap (FVG) – Price Imbalance Zone
A Fair Value Gap is a price gap created when buyers and sellers fail to meet equally. In ICT trading, FVGs often act as magnets for price, predicting potential pullback or continuation zones.
Breaker Block – From Trap to Entry Zone
A Breaker Block is a failed Order Block that flips its role—support becomes resistance or vice versa. Traders use Breaker Blocks for high-probability reversal setups.
Mitigation Block – Clearing Old Orders
This type of Order Block is used to mitigate or offset previous institutional positions before a new trend begins. It helps smart money rebalance its books.
Imbalance – Hidden Market Inefficiency
An Imbalance is a zone where buy and sell orders were uneven, leaving a void in price. The market often revisits these zones to restore balance.
Refinement – Pinpointing Precision Entries
Refinement involves zooming into lower timeframes (LTF) to find more precise entries within a larger Order Block or FVG. It allows for tighter stop losses and better risk management.
Volume Imbalance – Silent Clues in Liquidity
A Volume Imbalance is an area with low trading participation, often indicating a potential sharp move in the future once liquidity returns.
Institutional Candle – The Spark of Big Moves
An Institutional Candle is the candle that starts a significant impulsive move, marking the presence of institutional players entering the market.
Supply & Demand Zone – The Core of SMC
Supply Zones represent high-sell areas, and Demand Zones mark high-buy areas. They form the backbone of SMC trading and are used to forecast price reactions.
Displacement – Explosive Market Shift
Displacement refers to a strong impulsive move that clears liquidity and sets a new market direction. It is a common signature of institutional activity in both ICT and SMC trading.
Timing Models in ICT & SMC Trading
Timing is everything in Smart Money and ICT trading. These models help traders identify when the market is most likely to move with institutional flow rather than random noise.
London Killzone (8–11 AM London) – The Prime Window
This session often delivers high-probability setups as European markets open and liquidity floods in.
New York AM & PM Killzones – Dual Opportunities
The AM Killzone captures volatility from the NY open, while the PM Killzone (1–3 PM NY) is key for ICT’s Silver Bullet strategy.
Judas Swing – The Fakeout Trap
A false move in the opposite direction before the true trend takes off, commonly seen during session opens.
Asian Range – The Calm Before the Storm
The Asian session (Tokyo hours) often forms a tight range, which is later swept for liquidity in London or NY sessions.
ICT Power of 3 – Accumulation → Manipulation → Distribution
A powerful model that explains how the market builds orders, sweeps liquidity, and finally moves in its intended direction.
Silver Bullet Strategy – Precision in NY PM
An advanced ICT concept focusing on sniper entries during the NY PM session for quick, high-RR trades.
Session Overlap – The Volatility Catalyst
When two major sessions (London & NY) overlap, liquidity surges, creating strong trading opportunities.
Daily Bias Model – The Intraday Compass
Using higher timeframe analysis (daily/4H) to set a directional bias for the day, aligning trades with institutional flow.
Risk & Trade Management in ICT and SMC Trading
Managing your risk is just as important as finding the perfect entry. Smart Money and ICT traders use precise methods to protect capital and grow accounts strategically.
Risk-to-Reward (R:R) – The Profitability Formula
The ratio between potential loss (risk) and potential gain (reward) that determines the quality of a trade setup.
Partial Profits – Securing the Bag
Taking partial profits at predefined levels helps lock in gains while keeping a portion of the trade running for bigger moves.
Drawdown – Measuring the Downside
The percentage loss from your peak account balance, crucial for long-term sustainability.
Entry Refinement – Surgical Precision
Fine-tuning your entry on lower timeframes to achieve tighter stop-losses and higher R:R setups.
Target Zones – Exit Like a Pro
Predetermined areas based on liquidity pools or market structure where profits are taken.
Capital Allocation – Smart Risk Division
Distributing your capital and risk across trades to avoid overexposure.
Stop-Loss Hunting – The Retail Trap
Understanding how markets hunt obvious stop levels so you can set smarter, protected stops.
Trade Journaling – The Growth Engine
Keeping detailed records of your trades to review, analyze, and continuously improve your strategy.
How to Study This Glossary
- Spend 15 minutes daily reviewing terms.
- Mark 3–5 terms on live charts each day using TradingView.
- Combine with SMC/ICT strategy practice on demo.
- Revise weekly and gradually add timing models & advanced tools.
Bonus: Download the Free ICT + SMC Glossary PDF
Want to keep this handy?
[Coming Soon]
What’s Next in This Series (Coming Soon)
- ICT Chart Setup – A Complete Beginner’s Guide
- Order Blocks vs Supply Zones – Which One Wins?
- Top 10 Mistakes New ICT/SMC Traders Make
Final Word
Mastering ICT and SMC isn’t about memorizing setups — it’s about understanding the language of smart money.
This glossary is your first step toward fluency. Keep it close, revise often, and soon, these terms will become second nature.
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