ICT / Smart Money Concepts reference guide
A 3-candle imbalance where the high of candle 1 does not overlap the low of candle 3, leaving an unfilled gap in price. ICT calls these areas 'inefficiencies' that price returns to fill.
A previously bullish FVG that has been fully mitigated and now acts as resistance (or vice versa for bearish). Price has 'flipped' the imbalance.
The last opposing candle before a strong impulsive move that creates a BOS. Represents institutional order flow — 'the last place smart money bought/sold before the move.'
When price closes beyond a significant swing high (bullish BOS) or swing low (bearish BOS), confirming continuation of the current trend. Distinguishes trend continuation from reversal.
The first BOS in the opposite direction of the prevailing trend — signals a potential reversal. In a downtrend, a ChoCh is the first bullish BOS. The market 'character' has changed.
Smart Money Technique — when two correlated instruments (e.g., ES/NQ or EUR/USD and GBP/USD) diverge in structure. One makes a lower low while the other does not, signaling institutional positioning.
Price pierces beyond equal highs (EQH) or equal lows (EQL) — areas where retail stop orders cluster — before reversing. Institutions use this move to fill orders against retail stops.
A strong, impulsive move driven by institutional order flow — typically 3+ consecutive candles in one direction with no overlap. Often the move that creates FVGs and validates OBs.
Equal Highs and Equal Lows — price levels where two or more swing points cluster at the same price. Retail traders place stops beyond these levels, making them liquidity pools for smart money.
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