ICT Trading Explained for Futures Traders

Category: Strategy | Date: 2026-10-01

What is ICT trading?

ICT stands for Inner Circle Trader, the name Michael J. Huddleston teaches under. ICT trading is a way of reading raw price action without indicators. It looks at where obvious stop orders sit (liquidity), where price moved so fast it left gaps (fair value gaps), which candles started those moves (order blocks), and what time of day it is. Much of it overlaps with what is now called smart money concepts (SMC).

ICT was first taught mostly on forex, but the same ideas are used on futures such as NQ, ES and gold. Futures trade on one central exchange, so every trader sees the same highs, lows and candles, which suits a method built on marking levels.

This guide explains each concept in plain terms and links to a free scanner page for each one, where you can see the exact rules a computer uses to detect it. None of these concepts predicts where price will go. They are ways of deciding where to look.

Concept	In one line	Free scanner
Fair value gap (FVG)	A three-candle gap left by a fast move	FVG scanner
Inverse FVG (IFVG)	A fair value gap that price closed through, watched from the other side	IFVG scanner
Order block	The last opposing candle before a strong move	Order block scanner
Breaker block	An order block that failed and flipped	Breaker block scanner
Liquidity sweep	Price takes out a high or low and closes back	Liquidity sweep scanner
CRT (candle range theory)	One candle sweeps the previous candle's range and closes back inside	CRT scanner
Rejection block	A long-wicked candle that swept a level	Rejection block scanner
OTE	The 62% to 79% retracement of a swing (some extend it to 88.8%)	Fibonacci / OTE alerts

Market structure: BOS and CHoCH

Everything in ICT starts with structure: higher highs and higher lows in an uptrend, lower highs and lower lows in a downtrend.

Break of structure (BOS)

A break of structure is a candle closing beyond the last swing high in an uptrend, or the last swing low in a downtrend. It says the existing trend is continuing.

Change of character (CHoCH) and market structure shift (MSS)

A change of character is the first break against the trend: in an uptrend, price closes below the most recent higher low. ICT calls a sharp version of this a market structure shift. Traders read it as a possible reversal, not a confirmed one.

The difference between a break and a sweep matters here. If a candle trades beyond a high but closes back below it, that is a liquidity sweep, not a break of structure. Where the candle closes decides which one it is.

Fair value gaps (FVG)

A fair value gap is a three-candle pattern. In a bullish FVG the high of the first candle is below the low of the third, so the middle candle moved so fast that a range of prices barely traded. In a bearish FVG the low of the first candle is above the high of the third. The gap is measured wick to wick.

ICT traders watch for price to come back into the gap. A gap price has returned to is called mitigated or filled. Many gaps are never revisited, and many that are revisited do not hold. A gap is a level to watch, not a signal. The fair value gap guide shows how to identify one step by step.

Inverse fair value gaps (IFVG)

When a candle closes fully through a fair value gap, the gap has failed. ICT traders then watch the same zone from the other side: a failed bullish gap may act as resistance, a failed bearish gap as support. That flipped zone is an inverse FVG. See the IFVG guide.

Order blocks and breaker blocks

An order block is the last down candle before a strong move up (bullish) or the last up candle before a strong move down (bearish). The idea is that large orders were placed there. Most traders only count an order block when the move away from it was strong enough to leave a fair value gap, which ICT calls displacement.

A breaker block is an order block that failed. Price closed through it, and the zone is then watched from the other side. Both are explained with chart examples in the order block guide and the breaker block guide.

Liquidity and liquidity sweeps

In ICT, liquidity means resting orders, mostly stop losses, sitting just beyond obvious highs and lows: the previous day's high, a session low, or equal highs where many traders put their stops in the same place.

A liquidity sweep is a candle that trades beyond such a level and then closes back on the original side. It is also called a liquidity grab, stop hunt or stop run. ICT traders often wait for a sweep, then a shift in structure the other way, then a fair value gap or order block to enter from. The liquidity sweep guide lists the levels most traders watch.

Candle range theory (CRT)

Candle range theory is the same idea on a single candle. One candle, often a 1 hour, 4 hour or daily candle, sets a range. The next candle sweeps its high or low and closes back inside. Traders then look at the opposite side of the range as a target. See the CRT guide. A related idea is the rejection block: a single candle that sweeps a level and leaves a long wick. See the rejection block guide.

Premium, discount and OTE

ICT splits each swing in half. Above the 50% level is premium, where traders prefer to sell. Below it is discount, where they prefer to buy. The optimal trade entry (OTE) is a deeper retracement, between the 62% and 79% levels of the swing (70.5% is its midpoint), with many traders extending it to 88.8%. Our OTE guide covers it in detail.

Time: sessions, kill zones and the silver bullet

ICT puts as much weight on time as on price. Futures trade almost around the clock, from 6:00 pm to 5:00 pm New York time, Sunday to Friday, but the busiest moves cluster in a few windows.

Asia session: the evening in New York. Its high and low are often treated as liquidity for the London and New York sessions.
London kill zone: commonly given as about 2:00 am to 5:00 am New York time.
New York kill zone: commonly given as about 7:00 am to 10:00 am New York time, around economic releases at 8:30 am and the stock market open at 9:30 am.
Silver bullet: a one-hour window, 10:00 am to 11:00 am New York time, in which ICT traders look for a single fair value gap entry.
Midnight open: ICT uses the price at 12:00 am New York time as a reference level for the day.

A Judas swing is a false move early in a session that sweeps liquidity one way before price moves the other way.

Common ICT mistakes

Treating every gap as a trade. On a 1 minute chart there are dozens a day. Most traders filter by the higher-timeframe direction.
Ignoring where the candle closes. A wick beyond a high is a sweep. A close beyond it is a break. They mean opposite things.
Moving the stop after entry. Decide where the idea is wrong before you enter.
Oversizing on micro contracts. MNQ and MES are cheap per contract, which makes it easy to trade too many.
Not reviewing trades. Without a journal you cannot tell which setups actually work for you.

Watching ICT setups without watching every chart

Marking gaps, blocks and session levels by hand on several markets and timeframes is slow. Our free ICT scanner for futures does the detection on 16 markets, including NQ, ES and gold, on the 1 minute to 4 hour charts, and sends alerts by email or Discord. It only uses closed candles, so an alert is never withdrawn. It tells you where a pattern formed, not what price will do next.

If you trade the same setups on several prop firm accounts, Signal Trade App can also copy the trades you place on one leader account to the others, each with its own copy ratio and drawdown tracking.

Futures trading involves substantial risk of loss. Nothing in this guide is trading advice.

Frequently Asked Questions

What does ICT stand for in trading?

Inner Circle Trader, the name under which Michael J. Huddleston teaches his approach to reading price action through liquidity, fair value gaps, order blocks and time of day.

Is ICT the same as smart money concepts (SMC)?

They overlap heavily. SMC is a broader label that grew largely out of ICT's teaching. Most SMC terms, such as order blocks, fair value gaps and liquidity sweeps, come from ICT, sometimes with different names or rules.

Does ICT work for futures?

The concepts can be applied to any market with a chart, and many traders use them on NQ, ES and gold futures. Whether they work for you depends on your rules and risk management. No concept wins every time, and futures trading involves substantial risk of loss.

What are the ICT kill zones?

Time windows ICT traders focus on. The London kill zone is commonly given as about 2:00 to 5:00 am New York time, and the New York kill zone as about 7:00 to 10:00 am New York time.

What is the ICT silver bullet?

A setup traded in a one-hour window, usually 10:00 to 11:00 am New York time, where the trader looks for a fair value gap that forms after a liquidity sweep.

Is ICT trading profitable?

There is no reliable public evidence that ICT concepts alone are profitable. Like any method, results depend on the trader's rules, discipline and risk control. Treat any claim of high win rates with caution.

Is there a free ICT scanner?

Yes. Signal Trade App's free live scanner detects fair value gaps, inverse FVGs, order blocks, breaker blocks, liquidity sweeps, CRT and rejection blocks on 16 futures markets, with alerts by email or Discord.

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