Smart money concepts vs ICT

What it is

ICT (the Inner Circle Trader, Michael J. Huddleston) taught most of these ideas in videos and mentorships from the 2010s onward: order blocks, fair value gaps, liquidity, killzones and the rest. 'Smart money concepts' (SMC) is the name the online community gave to a simplified, renamed version of that material, mixed with older supply and demand and Wyckoff ideas. It spread on YouTube, TradingView and Discord in the late 2010s and early 2020s.

The biggest difference is time. ICT ties everything to the clock: killzones, macros, the Silver Bullet, Power of 3. SMC is largely time-agnostic and focuses on mapping structure. SMC adds its own words: internal vs swing structure, strong and weak highs and lows, inducement (IDM), extreme vs decisional order blocks, points of interest (POI) and flip zones.

Some words mean different things in each. 'Mitigation' in SMC is any return to a zone; in ICT a mitigation block is a specific failed order block. CHoCH is SMC's term, MSS is ICT's stricter one. SMC's order block is usually looser than ICT's.

How to spot it

• Strong high or low: one that caused a break of structure, so it's expected to hold. Weak high or low: one that didn't, so it's expected to be taken.
• Internal structure: the small swings inside a leg. Swing structure: the main highs and lows.
• Extreme order block: the one at the very start of the move. Decisional order block: one partway through, near where structure broke.
• POI: any zone you plan to trade from (an order block, FVG, supply or demand).

How to use it

• Learn the idea once and treat the other names as aliases; this site files each concept under its most common name.
• When following an educator, check which definitions they use, especially for order blocks, CHoCH and mitigation.

Common mistakes

• Assuming SMC and ICT are two separate proven methods; they are largely one set of ideas with different labels.
• Labelling swings after the fact so every chart fits.
• Forgetting that neither has published, independently tested results; your own backtests are the evidence that counts.

Related