This guide will delve into the most commonly used ICT (Inner Circle Trader) trading abbreviations, providing you with the knowledge needed to navigate the markets effectively.
IOFED – Institutional Order Flow Entry Drill
IOFED is a critical concept for traders who follow the institutional approach to trading. It refers to the process of entering trades based on the anticipated movements of large institutional players. These entities have the power to move markets, and understanding their order flow can provide traders with a significant edge.
BPR – Balanced Price Range
BPR represents a price range where the market has found equilibrium between buyers and sellers. It’s a key area to watch for potential reversals or continuations, as price tends to revisit these levels to test the strength of market participants.
CE – Consequent Encroachment (50% of FVG)
CE refers to the Fair Value Gap (FVG) midpoint, a critical level for traders looking to enter or exit trades. The 50% level is often where price action (PA) decides whether to continue in the current direction or reverse, making it a crucial point of interest.
SMS – Shift in Market Structure
A Shift in Market Structure (SMS) occurs when the market changes direction, breaking previous highs or lows and signaling a potential trend reversal. Identifying an SMS early can provide traders with profitable trading opportunities.
MS – Market Structure
Market Structure (MS) is the overall trend or direction of the market, defined by a series of highs and lows. Understanding the MS is fundamental for traders to identify potential entry and exit points.
OB – Order Block
An Order Block (OB) is a price area where large institutional orders are placed. These blocks can act as support or resistance levels, providing traders with potential areas to enter trades in the direction of the institutional flow.
OTE – Optimal Trade Entry
The Optimal Trade Entry (OTE) is a specific price level where traders can enter a trade with the highest probability of success. This level is often identified using Fibonacci retracement levels, typically between 61.8% and 79%.
IPDA – Interbank Price Delivery Algorithm
The Interbank Price Delivery Algorithm (IPDA) refers to the mechanisms by which banks and large financial institutions deliver prices to the market. Understanding IPDA can give traders insights into the timing and nature of price movements.
FVG – Fair Value Gap
A Fair Value Gap (FVG) occurs when price moves rapidly in one direction, leaving behind a gap. These gaps often represent areas of inefficiency in the market and can be targeted by traders for potential reversals or continuations.
BSL & SSL – Buy Side Liquidity & Sell Side Liquidity
Buy Side Liquidity (BSL) and Sell Side Liquidity (SSL) refer to the levels where buy and sell orders are clustered. These liquidity pools (LP) are often targeted by institutional players to trigger large moves in the market.
BISI & SIBI – Buy Side Imbalance Sell side Inefficient & Sell Side Imbalance Buy Side Inefficient
BISI and SIBI represent areas where there is an imbalance between buyers and sellers, often leading to rapid price movements as the market seeks to balance these inefficiencies.
COT – Commitment of Traders
The Commitment of Traders (COT) report provides insights into the positioning of large market participants, such as hedge funds and commercial traders. Analyzing the COT report can help traders anticipate market moves.
NFP – Non-Farm Payroll
The Non-Farm Payroll (NFP) report is a key economic indicator that measures the number of jobs added in the U.S. economy. It is known for causing significant volatility in the markets, making it a crucial event for traders to watch.
HTF & LTF – Higher Time Frame & Lower Time Frame
Higher Time Frames (HTF) and Lower Time Frames (LTF) refer to the different charting periods used in analysis. HTF provides a broader view of market trends, while LTF offers more granular insights for precise trade entries.
AMD – Accumulation, Manipulation & Distribution
The AMD cycle describes the phases of market movement: Accumulation (where positions are built), Manipulation (where weaker hands are shaken out), and Distribution (where profits are taken).
PO3 – Power of 3
The Power of 3 (PO3) is a concept that emphasizes three key market phases: accumulation, manipulation, and distribution. It helps traders understand the flow of price action within these phases.
RN – Round Numbers
Round Numbers (RN) are psychological levels in the market, such as 1.2000 in EUR/USD. These levels often act as strong support or resistance due to their significance to traders.
OSOK – One Shot One Kill
One Shot One Kill (OSOK) is a trading approach where the trader aims to execute a single, highly precise trade for maximum profit. It requires patience, discipline, and a deep understanding of market conditions.
LVG – Liquidity Void Gap
A Liquidity Void Gap (LVG) occurs when there is a sudden absence of liquidity, often leading to sharp price movements. Identifying and understanding LVGs can help traders anticipate where the market might seek to fill these voids.
EQH & EQL – Equal High & Equal Low
Equal Highs (EQH) and Equal Lows (EQL) are levels where price has reached the same point multiple times. These levels often represent strong support or resistance and can be used to anticipate breakouts or reversals.
TS – Turtle Soup
Turtle Soup (TS) is a trading strategy that targets false breakouts of key levels. It’s a contrarian approach, aiming to capitalize on the market’s tendency to trap traders on the wrong side of a move.
WDYS – What Do You See
“What Do You See” (WDYS) is a simple yet powerful question that encourages traders to analyze the market without bias. It’s about observing the raw price action and identifying patterns or setups that align with your trading plan.
CME – Chicago Mercantile Exchange (Bond Market Open)
The CME is one of the world’s largest futures and options exchanges. Monitoring the Bond Market Open at CME can provide insights into market sentiment, especially about interest rates and risk.
PDH & PDL – Previous Day High & Previous Day Low
The Previous Day High (PDH) and Previous Day Low (PDL) are key reference points for intraday traders. These levels often act as magnets for price, and understanding their significance can improve trade timing.
PWH & PWL – Previous Week High & Previous Week Low
Similar to PDH and PDL, the Previous Week High (PWH) and Previous Week Low (PWL) are critical levels for swing traders. These levels can signal potential breakout or reversal points in the market.
BMS – Break in Market Structure
A Break in Market Structure (BMS) occurs when the market breaks through a significant level, such as a support or resistance, indicating a potential change in trend direction.
CBDR – Central Bank Dealer Range
The Central Bank Dealer Range (CBDR) is a concept that refers to the price range where central banks are likely to intervene or influence the market. Understanding CBDR can help traders anticipate potential market-moving events.
SH – Stop Hunt
A Stop Hunt (SH) is a tactic used by larger market participants to trigger stop-loss orders, creating liquidity for their own trades. Identifying potential stop-hunt areas can protect traders from unnecessary losses.
RTO – Return to Order Block/Origin
RTO refers to the price returning to an Order Block or the origin of a move. It’s a key concept for traders looking to enter or re-enter trades at optimal levels.
SMT – Smart Money Tool
The Smart Money Tool (SMT) is a concept that refers to the tools and strategies used by institutional traders to execute their trades. Understanding SMT can provide retail traders with insights into the behavior of larger market participants.
PA – Price Action
Price Action (PA) refers to the movement of price over time, without the use of indicators. PA is the foundation of many trading strategies, focusing on the raw price movement to make trading decisions.
NY & NYT – New York & New York Time
New York (NY) is one of the major financial centers in the world, and the New York Times (NYT) is a critical reference for traders, especially during the overlap between the London and New York sessions.
LO – London Open
The London Open (LO) marks the start of the European trading session, often leading to increased volatility and trading opportunities. Traders often look for specific setups during this time.
IPDA – Interbank Price Delivery Algorithm
IPDA, as mentioned earlier, refers to the mechanism by which banks and financial institutions deliver prices to the market. Understanding the timing and flow of IPDA can give traders an edge in anticipating market movements.
These are ict trading abbreviations. you can also check our courses or blog to learn more about your favorite smart money topics.
