ICT is one of the most discussed approaches in retail trading. Strip away the jargon and it is a story about where stop orders sit, how price goes to collect them, and where it tends to turn afterwards. This guide explains each building block in plain language and shows how Forextity scores them.
ICT assumes that large participants need many orders on the other side of their trades. Resting stop-losses and pending orders cluster at obvious places: above recent highs, below recent lows, above the previous day's high (PDH) and below the previous day's low (PDL). Those clusters are called liquidity pools. Orders above a high are buy-side liquidity (buy stops and short stop-losses); orders below a low are sell-side liquidity.
A liquidity sweep happens when price pokes through a pool and then closes back inside the old range. The idea is that the move was a raid for orders, not a genuine breakout, so price is more likely to reverse.
1) Price sweeps below a prior low or the Asian low and closes back above it. 2) Price rallies and breaks a recent swing high — a market structure shift (MSS). 3) The rally leaves a fair value gap (FVG) or an order block. 4) Price pulls back into the OTE zone, the 62%–79% retracement of that rally. 5) The trader looks for an entry there with the stop under the sweep low and a target at opposite-side liquidity.
A bearish setup is the mirror image: a sweep above a high, a downward shift, then a pullback into the 62–79% zone from the top.
A fair value gap is a three-candle pattern in which the wicks of candles one and three do not overlap, leaving an imbalance. Traders watch it as a place price often revisits. An order block is the last opposite-coloured candle before the move that broke structure. Both are zones, not exact lines, and both lose value once price closes through them.
ICT teaches that the best liquidity raids happen at specific hours. Commonly quoted windows are the London session (about 02:00–05:00 New York time) and the New York morning (about 07:00–10:00 New York time). Teachers differ slightly, and the equivalent UTC times move by an hour with daylight saving. The Power of 3 describes a typical daily rhythm: accumulation (often the Asian range), manipulation (the sweep) and distribution (the real move).
Split the recent range in half. Above 50% is premium; below is discount. The method prefers buying in discount and selling in premium, which is why the scanner checks which side of equilibrium price is on.
It collects liquidity pools (PDH, PDL, the Asian range, equal highs and lows, recent swings), looks for a sweep in the last 30 candles, checks for a structure shift afterwards, builds the OTE zone, looks for FVG or order-block confluence inside it, and compares your daily trend and the kill-zone clock. Each condition adds to a 0–100 setup-quality score. The entry, stop and target it prints are an illustration of the method, not a recommendation.
No ICT checklist guarantees a win. Concepts are defined slightly differently by different teachers, many sweeps fail, and published win rates are rarely audited. Treat a high score as "more conditions line up", test the idea on a demo account, and size every trade with a fixed risk — see position sizing and risk/reward ratios.
See it on a live chart. Choose a strategy, a trading style and a pair — Forextity does the technical analysis for you.
Open the Strategy Scanner →Risk notice: this article is educational and is not financial advice. Trading leveraged products carries a high risk of loss. Read our Risk Disclaimer.
