Introduction to ICT Methodology

What is ICT Methodology?

ICT (Inner Circle Trader) methodology is a trading framework developed by Michael J. Huddleston that reveals how the interbank market-making algorithm delivers price. Unlike retail trading approaches that rely on lagging indicators, ICT focuses on understanding the institutional logic behind every market move.

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The History of ICT

Michael Huddleston began sharing his methodology on YouTube in 2010. Over the years, he released:

• 2016-2017 Mentorship — First structured paid mentorship covering PD arrays, Kill Zones, OTE
• 2020 Pandemic Content — Free YouTube teachings during COVID-19
• 2022 Mentorship — Most comprehensive revision with algorithmic Price Delivery theory
• 2023-2024 Updates — Unicorn Model, Venom Model, refined execution concepts

ICT's framework differs from SMC (Smart Money Concepts) — which is a simplified interpretation of ICT ideas by other educators. ICT methodology is more nuanced and time-centric.

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The 5 Pillars of ICT

Pillar 1: Algorithmic Price Delivery

The market is controlled by an algorithm (IPDA — Interbank Price Delivery Algorithm). This algorithm:

• Seeks liquidity above highs and below lows
• Delivers price to imbalances (FVGs)
• Operates on predictable time schedules
• Rebalances inefficiencies in price

Pillar 2: Time-Based Trading

ICT is unique in emphasizing TIME over price. Key time concepts:

• Kill Zones — Specific hours with highest probability setups
• Session Opens — Midnight, London, New York create setups
• ICT Macro Times — :50-:10 of specific hours show displacement
• Seasonal Tendencies — Monthly and quarterly bias patterns

Pillar 3: Liquidity Theory

Everything in markets revolves around liquidity:

• Buy-Side Liquidity (BSL) — Stop losses above swing highs
• Sell-Side Liquidity (SSL) — Stop losses below swing lows
• Engineered Liquidity — Equal highs/lows create obvious targets
• The algorithm ALWAYS seeks the next liquidity pool

Pillar 4: Premium & Discount Framework

Price operates in two zones relative to equilibrium:

• Premium (above 50%) — Ideal for selling
• Discount (below 50%) — Ideal for buying
• Equilibrium (50%) — CE of FVG, midpoint of ranges
• PD Arrays in premium = sell setups; PD Arrays in discount = buy setups

Pillar 5: Power of 3 (AMD Cycle)

Every move occurs in three phases:

1. Accumulation — Smart money builds position in a range
2. Manipulation — False move (Judas Swing) traps retail
3. Distribution — True directional move after manipulation

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How ICT Differs from Retail Trading

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Key ICT Concepts Overview

PD Arrays (Premium/Discount Arrays)

Institutional footprints on the chart:

• Order Blocks (OB) — Last opposing candle before displacement
• Fair Value Gaps (FVG) — 3-candle imbalance
• Breaker Blocks — Failed OBs that become support/resistance
• Mitigation Blocks — Partially filled OBs
• Liquidity Voids — Large single-candle inefficiencies

Time Concepts

• Kill Zones — London (2:00-5:00 AM EST), NY (7:00-10:00 AM EST)
• Silver Bullet — 10:00-11:00 AM, 2:00-3:00 PM, 3:00-4:00 AM EST windows
• ICT Macros — :50 to :10 of specific hours
• Power of 3 Candle — Daily/4H candle structure (open → low → high → close)

Market Structure

• Market Structure Shift (MSS) — Confirmed trend change
• Change of Character (CHOCH) — First sign of reversal
• Displacement — Strong momentum confirming direction
• Break of Structure (BOS) — Continuation signal

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Getting Started with ICT — The Learning Path

Phase 1: Foundation (Weeks 1-4)

1. Learn market structure (swing highs/lows, BOS, CHOCH)
2. Understand liquidity (BSL, SSL, equal highs/lows)
3. Master PO3 candle identification on Daily chart
4. Study Kill Zone timing (convert to your timezone)

Phase 2: Core Concepts (Weeks 5-8)

1. Identify FVGs and Order Blocks
2. Practice PD Array identification in premium/discount
3. Learn daily bias using HTF PO3 analysis
4. Paper trade London and NY Kill Zones only

Phase 3: Execution (Weeks 9-12)

1. Build a specific model (Silver Bullet, 2022 Model, etc.)
2. Trade one setup per day maximum
3. Journal every setup (win or loss) with screenshots
4. Refine entry timing using 1M/5M confirmation

Phase 4: Mastery (Months 4+)

1. Combine multiple timeframe confluence
2. Add session-specific models
3. Understand seasonal tendencies
4. Develop your personal trading plan

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Bangladesh Time Reference

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Common Beginner Mistakes

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Summary

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Related Topics

• Power of 3 — The foundational ICT cycle
• ICT Kill Zones — Time-based trading windows
• Fair Value Gap — Key PD Array for entries
• Market Structure Shift — Confirmation of direction change
• Daily Bias — How to determine daily direction