ICT Model 2 (HTF POI + MSS + IDM + FVG)

This model helps traders spot high-probability trade setups by combining key Smart Money Concepts: a higher timeframe point of interest (HTF POI), a break of structure (BOS), internal liquidity (IDM), and a fair value gap (FVG).

Steps

Let’s break it down step by step.

Step 1: Identify the High Timeframe POI

Start with a significant High-Timeframe Point of Interest (HTF POI), such as

• An order block
• A fair value gap (FVG)
• A major liquidity zone

This area is where you expect the price to react — either reverse or make a significant move.

Step 2: Wait for a Liquidity Grab

Before price reverses, it usually grabs liquidity from obvious levels like:

• Equal highs
• Equal lows
• Previous swing highs or lows

This happens when the market takes out stop-losses or triggers breakout traders, only to reverse right after. This grab clears out weak hands and sets the stage for the real move.

Step 3: Look for a Market Structure Shift (MSS) with Displacement

Once liquidity is taken, look for a Market Structure Shift (MSS) to confirm the change in direction.

What you need to see:

• A clear break of the internal structure (like a recent high or low).
• Strong displacement (a sharp move that leaves a gap)

Displacement is key. It shows real strength behind the shift, not just a small bounce.

Step 4: Identify Internal Liquidity (IDM)

Internal Liquidity refers to liquidity pools created within the structure, such as equal highs/lows or small consolidation zones.

This serves as a magnet for price before confirming the next move.

Step 5: Locate the Fair Value Gap (FVG)

After the displacement move that created the MSS, you’ll often see a Fair Value Gap.

This is an imbalance — a gap between candles where the price moved too fast and didn’t fill orders.

Mark this area. It’s where institutions often want to re-enter.

Step 6: Wait for Price to Retrace into the FVG and IDM Zone

Let price come back down (or up) into the FVG — especially if it overlaps with the IDM zone.

This confluence gives a clean entry point:

• Stops go beyond the liquidity grab.
• Targets aim for external liquidity or a major HTF level.
• Make sure your trade has a strong risk-to-reward ratio (1:2 or better).

Quick Tip

Don’t rush your entry. Let the price return to the FVG and IDM area first. This extra patience can improve your accuracy and reduce drawdowns.