You may or may not have come across the term ICT in trading communities, videos, or blogs. It’s been around for years, but in the last few years, it’s gained a lot of attention, especially from traders who want to understand what’s happening behind the price.

ICT stands for Inner Circle Trader, which refers to the trading methodology developed by Michael J. Huddleston. This approach focuses on studying how price actually moves, not randomly, but through the influence of larger players in the market.

At its core, ICT trading is a structured, rule-based approach that analyzes:

• Market structure
• Liquidity
• Institutional order flow

The idea is that financial markets are heavily influenced by large participants, such as banks, funds, and other institutions, often referred to as smart money.

These participants need to enter and exit large positions, and to do that, they look for liquidity — areas where lots of orders are resting. These zones are commonly found above recent highs or below recent lows.

Price is often pushed into these areas to trigger stop losses and activate pending orders. Once that liquidity is taken, the real move begins. ICT trading is designed to help you understand this process and position yourself after the manipulation, not during it.

ICT trading teaches traders how to:

• Identify where liquidity is resting (usually above highs and below lows)
• Recognize how price is delivered throughout the day using time-based models
• Understand the accumulation, manipulation, and expansion phases of price
• Spot institutional activity using tools like order blocks, fair value gaps, and market structure breaks

This method gives traders a framework to anticipate price movement by focusing on where the smart money is likely to enter or exit the market rather than reacting to the price after the fact.

Now that you understand what ICT trading is, let’s break down the core concepts that form the foundation of this approach.