ICT Strategy
Advanced Institutional Frameworks: Imbalances, Zones, Timing Models, and Algorithmic Delivery
Introduction
As traders progress deeper into the ICT methodology, they begin to see the market not merely as a reactionary mechanism, but as a highly structured, algorithmically driven system governed by predictable cycles of accumulation, manipulation, and delivery. This final section introduces the advanced institutional frameworks that govern not only where price moves, but how, when, and why it gets there. These concepts reveal the hidden logic behind market behavior across liquidity windows, session interactions, institutional footprints, and macro-level inefficiencies.
A central theme of this section is Fair Value Gaps (FVG), which expose the market’s imbalances—zones where price moved too quickly to fill orders on both sides. These inefficiencies act as magnets, drawing price back for rebalancing and offering traders precise entry or exit points. Complementing this is the Balanced Price Range (BPR), formed when opposing FVGs overlap and create powerful areas of consolidation, rebalancing, or continuation. BPRs serve as structural “anchors” around which the daily price delivery algorithm often rotates.
This section also includes Order Blocks (OBs), the institutional origin points of major moves. These zones reveal where smart money accumulated or distributed positions before a displacement, and their revisitation provides some of the highest-probability entries in ICT trading. When aligned with liquidity sweeps, FVGs, or OTE, order blocks become essential precision tools.
The advanced institutional section also covers timing and algorithmic delivery models, including Kill Zones, SMT divergence, Breaker Blocks, Liquidity Voids, PD Arrays, and the Interbank Price Delivery Algorithm (IPDA). These concepts illuminate the “when” behind price movement—why the Asian session accumulates, why the London session manipulates, why the New York session delivers, and how institutional liquidity cycles operate across days, weeks, and months.
Together, these advanced frameworks elevate the ICT methodology from structural analysis to a complete institutional roadmap. They provide traders with an exceptional level of foresight, allowing them to anticipate not just direction or entry but the entire cycle of market manipulation, continuation, and distribution. This final section equips traders to understand the full architecture of institutional price delivery—and to align their execution with the deepest layers of the market algorithm.
1. Time and Sessions: Kill Zones and Liquidity Delivery
Introduction
In ICT trading, when price moves is just as important as where it moves. Markets do not behave uniformly throughout the day; different sessions are dominated by different participants, with their own liquidity profiles and objectives. ICT formalizes this into the concept of Kill Zones—specific windows of time when institutional traders are most active and when the most meaningful liquidity grabs, displacements, and structure shifts tend to occur. The Asian Session often lays the groundwork with narrow ranges and clean highs and lows that serve as future liquidity pools. The London Open Kill Zone typically delivers the first aggressive move of the day, either sweeping Asian liquidity or establishing the initial directional bias. Later, the New York Open / London Overlap Kill Zone brings the highest global volume, either extending London’s trend or engineering a major reversal. By syncing trade execution with these time windows, ICT traders stop treating every candle as equal and instead concentrate their attention and risk during the periods when institutional delivery is most likely, turning time itself into a key edge.
The Asian Range: Setting the Stage (Recap)
The Asian Session (typically 7:00 PM to 12:00 AM EST) is a low-volume, consolidating period. Its primary strategic purpose is the Liquidity Staging process. The relatively tight Asian Range (the high and low of the session) creates a clean, easily identifiable pool of liquidity both above the high (BSL) and below the low (SSL). ICT traders treat the Asian Range as a setup phase, anticipating that the more aggressive London or New York sessions will first sweep liquidity above or below this range before initiating the true directional move for the day (the Asian Session Turtle Soup).
The London Open Kill Zone (LOKZ)
The London Open Kill Zone (LOKZ) is typically the first major institutional delivery window of the trading day. It is marked by the aggressive injection of European liquidity and volume, often leading to a sharp, high-momentum move that defines the initial daily bias.
Timing and Volatility
The LOKZ generally runs from 2:00 AM to 5:00 AM EST. This period is characterized by a significant spike in volatility compared to the Asian session. This is the optimal time for the London Open Manipulation, where institutional money either confirms the Asian bias or, more often, executes a targeted sweep of the Asian Range liquidity.
Structural Significance
The LOKZ is highly significant because it frequently establishes the true daily high or low for the session.
Initial Manipulation: Price will often aggressively move to sweep the BSL or SSL of the Asian Range. This sweep provides the necessary liquidity for institutions to establish their directional bias for the next 4–8 hours.
True Trend Initiation: Following the manipulation, the LOKZ often initiates a decisive Displacement that confirms a Market Structure Shift (MSS) on the lower timeframes, setting the stage for the New York session.
Pair Focus: This zone is particularly potent for pairs involving the Euro and the Great British Pound (EUR/USD, GBP/USD), as their liquidity pools are most active.
Operational Strategy
Traders focus on identifying a Liquidity Sweep of the Asian extremes, followed immediately by a Displacement move. A high-probability entry is sought in the retracement back into the Order Block or Fair Value Gap (FVG) created by this initial aggressive move. The move executed during the LOKZ is often the most substantial directional move of the trading day.
The New York Open / Overlap Kill Zone (NYOKZ)
The New York Open / Overlap Kill Zone (NYOKZ) is globally recognized as the period of peak volume and liquidity due to the simultaneous activity of both the London and New York financial centers. It is the second and often final major delivery window for institutional order flow.
Timing and Liquidity
The primary NYOKZ runs from 8:00 AM to 11:00 AM EST.
Highest Volume: This overlap of two major sessions results in the highest concentration of trading volume globally, making price movements highly dynamic and reliable.
Targeting London Liquidity: The NYOKZ often serves to continue the trend established by London or to execute a reversal by targeting the liquidity established at the high or low of the London Session itself.
Operational Functions
The NYOKZ provides two main opportunities for the ICT trader:
Trend Continuation: If London set a clear directional bias, New York often provides a final, deep Optimal Trade Entry (OTE) retracement back into a Discount or Premium zone before continuing the trend.
The Midday Reversal: Occasionally, New York will engineer a powerful reversal, typically around the 10:00 AM EST mark, targeting the highs or lows made in the first half of the London session.
The Silver Bullet: A specific, popular ICT model targets the brief, high-probability window between 10:00 AM and 11:00 AM EST (or 2:00 PM and 3:00 PM EST). This period is highly scrutinized for final liquidity delivery before the market slows down into the afternoon.
Strategy Alignment
The NYOKZ requires the trader to assess the daily bias established by the preceding sessions. High-probability setups during this period involve locating Order Blocks or FVGs that were formed earlier in the day and re-tested during the New York volume surge, using the increased liquidity to confirm a major move towards the session's ultimate target.
2. Dealing Ranges and PD Arrays (Premium–Discount Arrays)
Introduction
Discount and Premium give you a simple way to judge whether price is “cheap” or “expensive” within a range. ICT takes this one level higher with the idea of Dealing Ranges and PD Arrays (Premium–Discount Arrays). A Dealing Range is the active playground where the algorithm is currently repricing the market — typically defined from a meaningful low to a meaningful high (or vice versa). Inside that range, PD Arrays organize which institutional reference points (old highs, order blocks, fair value gaps, liquidity voids, breaker blocks, etc.) matter most in the premium half and the discount half. Instead of treating each concept in isolation, PD Arrays give you a ranked “menu” of institutional levels the algorithm is likely to use as it moves from liquidity to liquidity. This turns your chart from a mess of random lines into a structured hierarchy of targets.
Defining the Dealing Range
A Dealing Range is simply a structurally important swing low–to–swing high (in a bullish context) or swing high–to–swing low (in a bearish context) that the market is currently “working inside.”
In a bullish leg, the range is drawn from a key Swing Low up to the most recent significant Swing High.
In a bearish leg, the range is drawn from a key Swing High down to the most recent significant Swing Low.
This isn’t just any swing. In ICT logic, the Dealing Range is typically anchored to a move that:
Took significant liquidity (external range liquidity like old highs/lows), and
Printed clear Displacement and often a Market Structure Shift. TradingFinder
Once the Dealing Range is set, the 50% line becomes the equilibrium, and everything above/below that midpoint is categorized as Premium or Discount — exactly like you’ve already described, but now applied to a structurally important range, not just any local move.
PD Arrays: Premium vs. Discount Structures
A PD Array (Premium–Discount Array) is a list of key institutional reference points arranged by importance within the Premium and Discount halves of a Dealing Range. Different sources list them slightly differently, but a common ordering inside a Dealing Range includes items like: Scribd
Old Highs / Old Lows
Rejection Blocks
Bullish/Bearish Order Blocks
Fair Value Gaps (FVG)
Liquidity Voids
Breaker Blocks
Mitigation Blocks
The logic is:
In the Premium half of the range (above 50%), the algorithm looks for sell-side opportunities — bearish order blocks, bearish FVGs, breaker blocks, old highs stuffed with buy-side liquidity, etc.
In the Discount half (below 50%), it looks for buy-side opportunities — bullish order blocks, bullish FVGs, rejection blocks near old lows, and so on.
Why PD Arrays Matter in Practice
Instead of asking “Which line do I trade?”, PD Arrays tell you “Which line is senior?”. When price retraces into the Dealing Range:
You first ask: Are we in Premium or Discount?
Then: Within this half, which PD element ranks highest and lines up with bias (OB, FVG, breaker, void, old high/low)?
This turns confluence from “random stacking” into a clear priority system. Trades that respect the Dealing Range and PD array hierarchy will usually offer cleaner reactions, better risk-to-reward, and fewer fakeouts than trading any concept in isolation.
3. Draw on Liquidity (DOL) and Liquidity Targets
Introduction
Liquidity explains where the orders sit. The Draw on Liquidity (DOL) explains where price is being pulled toward next. In ICT methodology, the market is constantly choosing a “primary target” — a specific pool of liquidity that the algorithm is currently reaching for. This might be an old daily high, the high of a 20-day range, the top of a Fair Value Gap cluster, or a major session high/low. Once you understand the current Draw on Liquidity, you stop treating price action as random fluctuation and start seeing a directional narrative: from one liquidity pool to the next. The DOL is the compass that tells you why price is traveling in a particular direction, even when the path looks noisy on lower timeframes. TradingFinder+1
Defining the Draw on Liquidity
The Draw on Liquidity is the most attractive, currently “active” liquidity pool within the relevant timeframe that price is likely to seek next. Typical candidates include:
The most obvious external liquidity:
Prior 20-, 40-, or 60-day high/low (IPDA data range)
Previous weekly high/low
Previous daily high/low
Major internal liquidity levels:
Large, unmitigated FVGs or Liquidity Voids
Higher-timeframe Order Blocks
Clear session highs/lows (Asian range, London high/low, New York high/low)
Whichever pool most clearly fits the current bias (bullish or bearish) and offers the richest concentration of stops and pending orders typically becomes the active Draw.
Bias + DOL = Directional Story
ICT’s idea is that price does not just wander — it is “delivered” from one liquidity cluster to another. When your Daily/Weekly bias is bullish:
The Draw on Liquidity will usually be above current price (old highs, buy-side liquidity).
When bias is bearish, the primary Draw tends to be below current price (old lows, sell-side liquidity). TradingFinder
This gives you a directional framework:
If price is consolidating under an obvious old high and bias is bullish, that old high is very likely the next DOL.
If price is hovering above a prior 60-day low with bearish bias, that low becomes the probable Draw.
Using DOL in Trade Planning
The Draw on Liquidity is not used as an entry signal by itself; it is a targeting and filtering tool:
You avoid fading moves that are clearly traveling toward a major liquidity draw.
You plan take-profit levels around these pools (e.g., prior day’s high, IPDA 20-day high, large FVG boundary).
You wait for the DOL to be hit and swept — then you look for MSS, OTE, and OB/FVG confluence to enter in the opposite direction.
Once the Draw on Liquidity has been satisfied, the algorithm will usually “select” a new target, and the entire narrative for the next leg of price action resets.
4. Liquidity Voids and Volume Imbalance
Introduction
Fair Value Gaps explain small, localized inefficiencies in price delivery. Liquidity Voids extend the same idea to a larger, more dramatic scale: entire zones where price moved so aggressively in one direction that almost no two-sided trading occurred. These voids appear as long, one-sided displacement moves with little to no overlap between candles. ICT treats liquidity voids as macro-imbalances in the delivery algorithm — large “air pockets” that price is highly motivated to revisit and rebalance over time. Understanding these zones helps traders anticipate where price might return, where movement is likely to accelerate, and which levels are structurally important beyond a single FVG. Broker de Forex en Europa | FXOpen EU+2Coconote+2
Defining Liquidity Voids
A Liquidity Void is a price range characterized by:
One or more large Displacement candles in the same direction
Minimal or no overlap between the highs and lows of consecutive candles
Almost exclusively one-sided order flow (all aggressive buying or all aggressive selling)
Conceptually, it is the same idea as an FVG but on a larger scale — often spanning multiple candles and sometimes multiple FVGs. It signals a moment where smart money repriced the market aggressively, leaving little “normal” trading behind.
Relationship to Fair Value Gaps and Imbalance
You can think of the hierarchy like this:
FVG = small imbalance (3-candle pattern).
Liquidity Void = extended imbalance (multi-candle region, often multiple FVGs).
Both represent Buy-side Imbalance / Sell-side Inefficiency (BISI) or Sell-side Imbalance / Buy-side Inefficiency (SIBI). Over time, price often:
Trades back into the void to “fill” or rebalance it.
Pauses or reacts at the midpoint (a form of Consequent Encroachment on a larger scale). Scribd
How ICT Uses Liquidity Voids
In ICT methodology, Liquidity Voids are used to:
Anchor directional bias:
In a strong sell program, a large downside void suggests institutional willingness to aggressively reprice lower.
Define targets:
If price leaves a glaring void behind, traders can anticipate a future revisit, often using it as a medium-term target.
Build confluence with PD Arrays:
A void overlapping with a higher-timeframe OB or sitting inside a Discount/Premium zone becomes a powerful reference for entries and exits.
Traders typically avoid entering inside the void itself; instead, they look to enter on the approach to it or on the mitigation of its boundary, using lower-timeframe structure to refine the exact entry.
5. Breaker Blocks and Mitigation Blocks
Introduction
Order Blocks mark the origin of a strong institutional move. But markets don’t always respect the first OB forever. Sometimes price breaks through an Order Block, takes its liquidity, and then later uses that same area as a reference in the opposite direction. ICT formalizes these behaviors as Breaker Blocks and Mitigation Blocks. These concepts help traders understand how old institutional zones can change roles: from support to resistance, from accumulation zones to distribution zones, and from original entry points to later “cleanup” zones. Properly recognizing breakers and mitigations gives an added layer of nuance to your order-block logic and helps you avoid blindly trusting every OB forever. Scribd+1
Breaker Blocks: Flipped Order Blocks
A Breaker Block is essentially a failed Order Block that has been structurally repurposed.
In a bearish breaker scenario:
Price first respects a bullish OB and rallies from it.
Later, price returns, trades back through that bullish OB, and breaks its protecting Swing Low.
That old bullish OB zone can now act as a bearish breaker — a resistance zone where price may react and continue lower.
In a bullish breaker scenario, the logic is mirrored:
An old bearish OB is violated to the upside; price breaks its protecting Swing High.
That prior bearish zone now becomes a bullish breaker, often providing future support.
The underlying idea is that institutions may have reversed their intent or liquidated their prior positions and are now using the same price area in the opposite direction.
Mitigation Blocks: Cleaning Up Old Positions
A Mitigation Block focuses on the idea that institutions rarely fill their entire position on the first attempt. After a large displacement:
Price will often return to the origin area, not necessarily to reverse, but to mitigate remaining exposure — closing hedges, completing fills, or rebalancing inventory. Scribd+1
In practice, a Mitigation Block often looks like:
A revisit of the original OB zone (or part of it)
A reaction that is less dramatic than the original displacement but still directional
Continuation in the direction of the original trend once mitigation is complete
Mitigation Blocks can provide excellent continuation entries when they line up with:
OTE in the current Dealing Range
FVG or Liquidity Void boundaries
Active PD Array levels in Discount (for longs) or Premium (for shorts)
Why These Blocks Matter
A lot of traders get trapped treating every Order Block as permanently valid. Breaker and Mitigation logic helps you:
See when an OB has failed and flipped (Breaker)
Recognize when a revisit is just cleanup, not a full reversal (Mitigation)
Avoid forcing trades off stale institutional zones that have already served their purpose
This keeps your chart cleaner and your trade logic closer to how institutional behavior actually evolves over time.
6. SMT Divergence (Smart Money Technique Divergence)
Introduction
Most retail traders think in terms of “RSI divergence” or MACD divergence. ICT introduces a different style of divergence called SMT Divergence (Smart Money Technique Divergence). Instead of comparing price to an indicator, you compare two correlated markets — for example, EUR/USD vs. GBP/USD, or ES vs. NQ. When one market makes a new high (or low) and the other fails to confirm, ICT interprets this as a sign that smart money is distributing or accumulating in a hidden way. SMT Divergence becomes a powerful tool for confirming bias, spotting exhaustion near liquidity pools, and filtering out low-quality setups that “look good” on a single chart but don’t align with the broader intermarket narrative. ICT Trading+1
How SMT Divergence Works
The logic is straightforward:
Take two instruments that are normally positively correlated (e.g., two major USD pairs, or two stock indices).
Watch them as they approach a key liquidity pool (old high/low, daily high/low, etc.).
Look for non-confirmation:
Bearish SMT:
Instrument A makes a higher high, sweeping buy-side liquidity.
Instrument B fails to make a higher high and instead forms an equal or lower high.
This suggests underlying weakness — smart money may be distributing into the spike in A while refusing to push B as high.
Bullish SMT:
Instrument A makes a lower low, sweeping sell-side liquidity.
Instrument B fails to make a lower low and instead forms an equal or higher low.
This indicates potential accumulation — smart money may be absorbing liquidity in A while quietly supporting B.
Using SMT with Other ICT Concepts
SMT Divergence is rarely traded in isolation. It is most powerful when it:
Occurs at or near a major liquidity pool (old high/low, Asian range extremes, IPDA highs/lows).
Aligns with a Market Structure Shift on your primary instrument.
Lines up with OTE, Order Blocks, or FVGs as concrete entry zones.
Example workflow:
Identify a suspected Draw on Liquidity (e.g., yesterday’s high).
As price approaches that high, watch a correlated market.
If your instrument makes a stop-run above the high while the correlated market refuses to confirm, you have SMT.
Wait for MSS + Displacement in your direction, then refine entry with OTE/OB/FVG.
This turns SMT into a high-quality filter that keeps you from blindly buying into obvious highs or selling obvious lows when the intermarket story doesn’t agree.
7. Interbank Price Delivery Algorithm (IPDA) and Higher-Timeframe Data Ranges
Introduction
Many ICT concepts operate on the intraday level: kill zones, session highs/lows, short-term liquidity sweeps. The Interbank Price Delivery Algorithm (IPDA) pushes your perspective up to the higher timeframe. IPDA is ICT’s way of describing the structured, rule-based manner in which price is “delivered” between higher-timeframe liquidity and imbalance zones over weeks and months. Practically, traders implement this idea by tracking 20-, 40-, and 60-day highs and lows and using them to anchor daily and weekly bias, Draw on Liquidity, and expectations for large moves. It’s the macro skeleton behind your intraday setups. ICT Trading+2TradingFinder+2
IPDA Data Ranges: 20 / 40 / 60 Days
IPDA focuses on three rolling lookback windows:
The last 20 days (roughly one trading month)
The last 40 days
The last 60 days
For each of these windows, traders mark:
The highest high (external buy-side liquidity)
The lowest low (external sell-side liquidity)
These points represent major liquidity accumulation zones that smart money is likely to target over the coming weeks. Price tends to oscillate between these external extremes and internal imbalances (FVGs, voids) within the range.
Quarterly Shifts and Seasonal Behavior
ICT also describes quarterly shifts — 3–4-month rotations where the market transitions from one macro phase to another (e.g., from aggressively hunting external highs to aggressively hunting external lows). ICT Trading+1
At this scale:
IPDA explains how price alternates between External Range Liquidity (swing highs/lows) and Internal Liquidity (FVGs, OBs inside the broader range).
A clear, displacement-backed Market Structure Shift on the daily or weekly chart can mark the beginning of a new IPDA phase.
Traders then project 20/40/60 days forward from that shift to anticipate where future significant highs/lows and major draws on liquidity are likely to form.
Using IPDA with Intraday Models
IPDA doesn’t replace your intraday ICT tools — it frames them:
If price has recently taken a 60-day high, the next major IPDA draw might be the 60-day low.
Knowing this, you treat intraday buy setups more cautiously and give extra respect to bearish MSS + OTE structures.
Conversely, if a fresh 40-day low has been swept and bias turns bullish, you know the bigger engine is now likely pulling price toward higher external liquidity.
When you combine IPDA ranges with:
Daily/weekly bias
Kill zones (London, New York)
PD Arrays in the active Dealing Range
…you get a cohesive top-down narrative: from macro liquidity targets (60-day high/low) all the way down to your 5-minute entry in an Order Block inside an FVG at OTE.
8. Power of Three (PO3) and the AMD Model (Accumulation–Manipulation–Distribution)
Introduction
A lot of ICT logic can feel abstract until you see how it plays out over a single trading day. The Power of Three (PO3) and AMD model (Accumulation–Manipulation–Distribution) are ICT’s way of explaining the typical intraday “life cycle” of a market. In simple terms, a day often unfolds in three phases: first, price is accumulated in a tight range; second, there is a sharp manipulation or stop-run; finally, price is distributed in the true directional move of the session. PO3 gives traders a mental template for how the daily candle is built: open, run against, and then expansion in the actual direction. Once you overlay this on your kill zones and liquidity pools, intraday price action becomes much easier to contextualize. ICT Trading+1
The AMD Cycle: Accumulation, Manipulation, Distribution
Accumulation
Early in the session (often during or just after the Asian Range), price consolidates in a relatively narrow band.
Smart money quietly builds positions while retail traders see “chop” and randomness.
This phase typically sets up clean internal liquidity (equal highs/lows inside the range) that will later be used as fuel.
Manipulation
During a kill zone (London Open or New York Open), price suddenly spikes against the intended trend.
It runs stops above the range high or below the range low, grabbing buy-side or sell-side liquidity.
This is the stop-hunt phase: visually dramatic, emotionally triggering, and often mistaken as a breakout by uninformed traders.
Distribution (Delivery)
After the manipulation and liquidity sweep, price reverses sharply and begins its true directional move in line with the daily bias.
This leg is typically marked by Displacement, FVG creation, and often a Market Structure Shift on intraday timeframes.
The bulk of the daily range is formed here; the session closes with a larger body candle in the direction of distribution.
Power of Three and the Daily Candle
The “Power of Three” frames the daily candle as:
Open
Run against the open (manipulation away from the true direction)
Run away from the open (expansion in the real direction) ICT Trading
When you look back at many daily candles, you’ll notice:
A small initial move that ends up being the wick against the eventual direction.
A large body where the real move took place during active kill zones.
For ICT traders, the job is to:
Use Daily Bias + IPDA + liquidity analysis to decide what direction the distribution is likely to be.
Stand aside during the manipulation phase if it trades into opposing liquidity.
Use OTE + OB + FVG after the manipulation to capture the distribution phase with favorable risk-to-reward.