What is ICT
Lesson 01 · 6 min read · By DT Terminal
Who ICT is, how it relates to SMC, what is and is not proven, and how to study the method as rules you can test.
Who ICT is
ICT stands for The Inner Circle Trader, the online name of Michael J. Huddleston. His teaching came in three stages:
- Forum threads from around 2012, on sites such as BabyPips.
- A paid private mentorship, recorded around 2016 to 2017. That "Core Content" later appeared on YouTube.
- The 2022 ICT Mentorship: 41 free YouTube episodes from January to June 2022.
His backstory comes from his own posts and videos and is not independently verified. He has no documented bank or fund trading career.
Go deeper
The private mentorship was recorded as monthly modules. The 2022 Mentorship popularised the "2022 model" most ICT content builds on: a liquidity sweep, displacement, a market structure shift, then an entry at a fair value gap.
The "institutional" framing of the method is his interpretation.
ICT and Smart Money Concepts
ICT is one person's framework, with its own time tools (killzones, power of three, the Silver Bullet) and its own vocabulary.
Smart Money Concepts (SMC) is the wider community label built on that vocabulary. It usually keeps the structure and zones (order blocks, fair value gaps, liquidity, breaks of structure) and drops or simplifies the timing. It also added terms ICT does not centre, notably CHoCH and inducement.
Go deeper
SMC was spread by many educators besides ICT. He has objected to others repackaging his material, and critics reply that he renamed older ideas himself.
The method in five ideas
Each idea is a claim to test, not a fact about markets.
- Price moves from liquidity to liquidity. Orders cluster beyond obvious highs and lows. Price is drawn to them, then often turns.
- Fast moves leave footprints. A strong one way move (displacement) leaves gaps and a last opposite candle that ICT expects price to revisit.
- Buy cheap, sell expensive. Split the range at 50%: longs below it (discount), shorts above it (premium).
- Time matters as much as price. Setups are looked for only in set windows of the New York day.
- Start from the higher timeframe. Pick the liquidity more likely to be reached, then look lower for an entry that way.
Go deeper
ICT calls the zones price may react at PD arrays, short for premium and discount arrays.
Old chart events, new names
Critics argue much of ICT renames older ideas. An order block is a stricter supply or demand zone. A liquidity sweep is a stop run or false breakout. Turtle soup, covered later in this course, is the name of a setup Connors and Raschke published in Street Smarts (1995).
The fair view: the vocabulary is newer and more precise in places, and the chart events underneath are old. The DT Intensive teaches each one plainly in Day 11, Day 12 and Day 13.
Three ICT names
The chart event under each name
- Fair value gap
- Bullish order block
- Bearish order block
- Old high or low
Bullish
the move that follows is up
Bearish
the same event upside down
Liquidity sweep
older name: a stop run
Fair value gap
a three candle gap; the event predates the name
Order block
a stricter supply or demand zone
What is and is not proven
No peer reviewed study tests order blocks, fair value gaps, killzones or any other ICT construct as ICT defines them. The closest research is on stop loss orders: they cluster at round numbers and just beyond obvious highs and lows, and can speed a move when they trigger (Osler, Federal Reserve Bank of New York).
That supports "liquidity sits beyond obvious levels". It does not support "someone is hunting your stops".
Go deeper
Currency trading activity does concentrate around certain hours (Andersen and Bollerslev).
ICT also teaches that price is delivered by an Interbank Price Delivery Algorithm (IPDA). No documented interbank algorithm works that way, and the claim cannot be checked from public data, so most traders who use ICT treat it as a lens.
The record and the criticism
Judge a method by records, not reputation. There is no independently audited, long term live trading record from Huddleston. Independent attempts to track his live calls describe the results as mixed.
He publicly entered the 2024 Robbins World Cup Trading Championship. Widely reported accounts say the entry ended in a large loss, but no official result has been published.
These concepts are also easy to mark after the fact, so their value has to come from your own tested results.
Go deeper
That criticism applies to every student, not just to ICT. A finished chart always has a last opposite candle and a gap somewhere, so marking it in hindsight makes any method look more accurate than it is. None of this proves the ideas fail.
Study it as rules you can test
Treat ICT as hypotheses. For each concept:
- Write it as one checkable rule.
- Test it on a real sample of replays or logged trades, not screenshots (Day 9).
- Keep risk rules separate. No concept justifies a bigger position.
Example 01
15 gaps, one rule
EURUSD · M151 of 15 gaps keptsweep, shift, gapOld low 1.08380, swept to 1.08310. Close above the last lower high 1.08660 at 1.08730. Gap 1.08510 to 1.08620.
Write one concept as a rule
Tag every trade by its concept
OB or FVG, and filter by tag.Go deeper
A checkable rule reads like this: "a bullish order block is the last down close candle before a move that closes above the prior swing high".
On risk: EU regulators make CFD brokers warn that 74% to 89% of retail accounts lose money (ESMA, 2018), and no vocabulary changes that, as Day 8 covered.
Link the trades you take with a concept to its strategy, so its results are read on their own. Once your broker is connected, trades sync from it and cannot be edited afterwards, so the tag filter shows what each concept really did for you. Day 26 shows how that review loop works.
Check yourself
Quick review · 0 of 0
Five questions on what ICT is and how to study it.