ICT / Smart Money Glossary
Cornerstone concept of 6. The Smart Money / ICT vocabulary that powers Layer 3 of our TA stack.
Core concepts
Order Block (OB)
The last opposite-direction candle before a strong impulse move. Bullish OB = the last down candle before a strong up impulse; bearish OB = the mirror.
Why it matters: institutional orders often cluster at OBs because they were the last point where opposite-side liquidity was absorbed. Returns to an OB are common rebound zones.
Fair Value Gap (FVG)
A 3-candle pattern where the middle candle creates an "imbalance" — a gap between candle 1's wick and candle 3's wick. The gap is "unfilled" until price returns into it.
Why it matters: imbalances often act as magnets for price; markets have a tendency to revisit FVGs to "fill" them.
Inverse FVG (IFVG)
When price passes through an FVG and the gap flips polarity. A bullish FVG that fails to hold becomes a bearish IFVG.
Liquidity Sweep
When price briefly exceeds a swing high (or low) and snaps back. The exceeded swing is the "liquidity pool" that just got swept; the snap-back often signals a reversal.
Equal Highs / Equal Lows (EQH / EQL)
Two or more swing extremes at near-identical prices form a liquidity pool that often gets swept before a real move begins. BlitzPulse uses 5 basis-points tolerance for "equal".
Premium / Discount
Given a recent swing range, the upper half is "premium" (sellers' zone in a bull bias), the lower half is "discount" (buyers' zone in a bull bias). The midpoint is "equilibrium."
Breaker Block
A failed Order Block. When price closes through an OB invalidating it, then returns to that zone from the other side, the OB has flipped polarity — a breaker.
Break of Structure (BOS) / Change of Character (CHoCH) / MSS
(Cross-references to the Market Structure card.)
What this tells you
ICT/Smart Money concepts treat charts as a record of where institutional orders have been filled. The patterns mark zones of likely future participation. They don't predict the future; they identify regions where price tends to react.
How to use it
- Mark OBs and FVGs on your higher timeframes; trade their reactions on lower timeframes.
- Use Premium/Discount to refine entries: in a bullish bias, prefer entries from the discount zone of the recent range.
- Confluence matters: an OB plus an FVG plus an EQL sweep is far stronger than any single zone.
When NOT to trust it
- Mechanical interpretation without context. ICT is a vocabulary, not a strategy. Direction comes from market structure.
- On illiquid symbols where the institutional flow argument doesn't apply.
- During earnings or major news where flow is event-driven, not order-book-driven.
Related concepts
The full library of ~30 ICT-specific cards (one per concept) lands over the first 30 days post-launch.