ICT Trading, short for Inner Circle Trading, is a trading methodology coined by Michael Huddleston, a well-known forex trader with over 20 years of experience in the industry
. The ICT trading strategy is based on chart technical analysis and relies on price action, levels of support and resistance, and order blocks to identify potential trading opportunities
. The methodology is popular among traders due to its focus on price action and its adaptability to various market conditions
. Key ICT Concepts include:
- Liquidity : This concept refers to the levels on the chart where short sellers have their stops (buy-side liquidity) and where long-biased traders have their stops (sell-side liquidity)
- Displacement : This concept involves the idea that markets are built off of price action and important levels can play a significant role in where and why the price reverses
- Market Structure Shift : This concept focuses on the change in market structure, which can provide insights into potential trend reversals
- Inducement : This concept refers to the process of inducing price movement in a specific direction, often by creating a false sense of demand or supply
- Fair Value Gap : This concept involves the idea that markets may occasionally gap up or down to a fair value, which can provide potential trading opportunities
The ICT trading methodology has gained popularity among traders due to its focus on price action and its adaptability to various market conditions. However, it is essential to note that the strategies taught by Michael Huddleston are more methodologies than complete strategies, and traders need to spend hundreds or even thousands of hours piecing together and digesting the content to make sense of it
. The ICT trading strategy may be profitable for some traders but not for many
