Glossary

Trading, structure and order flow

The vocabulary of the MCI method: how structure is read, where liquidity sits and what the algorithm does with it.

121 terms

IIStructureBOS, MSS, displacement and dealing range

BOSBreak of Structure: A swing break WITH the trend: it confirms continuation, not a turn.
CHoCHChange of Character: A synonym for MSS: the first break against the trend after a sweep. Not to be confused with the BOS, which runs with it.
CISDChange in State of Delivery: A close above — or below — the open of the opposing candle series. Finer than the MSS, and it arrives earlier.
Daily biassesgo diario: The direction the daily suggests for today: which pool is the magnet, and whether we sit in premium or discount.
Dealing rangerango operativo: The range between the last relevant high and low. Its 50% splits it into premium and discount.
Discount: The lower half of the range: the zone where you only look for BUYS.
Displacementdesplazamiento: 2–3 full-bodied candles that break structure and leave an FVG. The footprint of institutional size stepping in.
Divergence phantom: A lower-timeframe break that looks like a structure change and is an internal sweep. You rule it out by demanding displacement.
EquilibriumEQ · 50%: The midpoint of the dealing range. Above it you are expensive, below it cheap.
HH / HL / LH / LLhigher high · higher low · lower high · lower low: The basic swing labelling. HH+HL = bullish; LH+LL = bearish.
ITH / ITLIntermediate Term High/Low: A swing with an STH/STL on each side. The degree that defines the day's working structure.
LTH / LTLLong Term High/Low: A swing with an ITH/ITL on each side. The highest degree: it sets the underlying bias.
MSSMarket Structure Shift: A break AGAINST the trend after a liquidity sweep. It is the number-one confirmation in almost every MCI model.
Premium: The upper half of the range: the zone where you only look for SELLS.
STH / STLShort Term High/Low: A minor-degree swing: it has lower candles on both sides. Breaking it does not change the higher structure.
Swing point: A high or low with lower candles on both sides. It is the unit structure is read with.
Top-downmulti-timeframe analysis: The daily sets the magnet and the bias, the 1H the array on the way, the 15m the sweep, the 5m the execution. Never the other way round.

IIILiquidityThe market's fuel

Acceptance: The opposite of a sweep: price CLOSES beyond the level and continues. Never fade acceptance.
BSLBuy-Side Liquidity: The buy stops stacked ABOVE highs. Price visits them like a magnet.
DOLDraw on Liquidity · the magnet: The pool price is pulling towards today. The session's first question: without a DOL you cannot judge whether a setup runs with or against.
Equal highs / lowsEQH · EQL: Two or more extremes at the same price. They concentrate stops: magnets, not support.
ERLExternal Range Liquidity: The extremes of the range, where the stops live. Price travels from the internal array towards them.
HRLRHigh Resistance Liquidity Run: A dirty path, full of overlaps and prior levels. Same R:R on paper, far less chance of getting there.
InducementIDM · the bait: An 'obvious' intermediate high or low the algorithm manufactures so retail enters too early. Their stops fund the institutional entry at the real zone.
IRLInternal Range Liquidity: The arrays inside the range — unmitigated FVGs and OBs. Price travels from the extreme towards them.
LRLRLow Resistance Liquidity Run: A clean path to the target: no overlaps, no unmitigated arrays. Price crosses it fast.
ONH / ONLOvernight High/Low: The extremes of the overnight session. Reference pools for the New York open.
Open Float: The liquidity still UNRESOLVED between the reference extremes. Once the float is exhausted, consolidation follows.
PDH / PDLPrevious Day High/Low: The previous day's high and low: the reference daily liquidity pools.
Raidsweep: Price running into a liquidity pool to trigger those stops, then reclaiming. It is manipulation, not direction.
REH / RELRelative Equal Highs/Lows: Highs or lows that are 'relatively' equal. They need not match to the tick: what matters is where people put their orders.
Round numbers: A pool nobody manufactures and that is always there: retail places stops and targets at round figures out of habit.
SSLSell-Side Liquidity: The sell stops stacked BELOW lows.
Trendline liquidity: The stops stacked along an obvious trendline. The more people draw it, the better it works as a trap.

IVPD ArraysFVG, Order Blocks and Breakers

BISIBuy-Side Imbalance Sell-Side Inefficiency: A bullish FVG: the gap sits below and acts as support on the return.
BPRBalanced Price Range: The overlap of two opposing FVGs. A high-quality reaction zone.
Breaker: An Order Block that failed and was broken: on the return it acts in the opposite direction to the original.
CEConsequent Encroachment: The 50% of an FVG. The most reliable reaction level inside the gap, and where the order goes.
First-return rule: An array works because unfilled orders remain. After the first touch they are filled: the second visit is degraded.
FTRFailed To Return: A zone price did NOT revisit after breaking structure: it keeps pending orders and stays valid.
FVGFair Value Gap · inefficiency · imbalance: A three-candle gap where price moved so fast it went untraded. It tends to rebalance.
IFVGInversion FVG: An FVG traded through with a close on the other side: it inverts and starts acting in the opposite direction.
Implied FVG: An inefficiency with no visible gap: the bodies almost touch but the wicks give away badly traded price.
Liquidity voidvacío de liquidez: A stretch covered with almost no trading. Price tends to come back and fill it.
Mean thresholdMT · 50% of the OB: The midpoint of an Order Block: where the limit order lives, just like the CE inside an FVG.
Mitigation Block: A zone price returns to so a trapped institutional position can exit at a better price. Like a breaker but without a prior liquidity sweep; in ICT's original usage it tends to be traded as continuation, not reversal.
NWOG / NDOGNew Week/Day Opening Gap: The gap between the close and the new week's or day's open. It acts as a magnet.
Order BlockOB: The last opposing candle before the displacement that breaks structure. When price returns, the same actor defends it.
PD ArrayPremium/Discount Array: Any zone where the algorithm delivers price: FVG, Order Block, Breaker, Mitigation Block…
Propulsion Block: An Order Block that forms on top of an earlier OB. Price returns, leans on it and accelerates.
RDRB / RRPRrebalanced and redelivered range: A BPR that rebalances and delivers again in the same direction: the exception to the first-return rule.
Reclaimed Order Block: An OB pierced and then reclaimed with a close back inside: still valid. It only becomes a breaker if it closes beyond and stays there.
Rejection Block: A zone formed by the wicks — not the bodies — of a violent rejection.
SCOBSingle Candle Order Block: A candle that sweeps liquidity and closes back inside (sweep + reclaim); it refines the OB down to one candle so you can enter on a lower timeframe when the larger block gives an unaffordable stop. The sweep and the re-entry are the core.
SIBISell-Side Imbalance Buy-Side Inefficiency: A bearish FVG: the gap sits above and acts as resistance on the return.
Vacuum Block: A price gap left by an event or an open. NDOG and NWOG are particular cases.
Volume ImbalanceVI: A gap between one candle's CLOSE and the next one's OPEN, with the wicks touching. It is not an FVG: that is the gap between the wicks of three candles.

VTimeKillzones and the patterns of the clock

ADRAverage Daily Range: The day's average travel over 20–30 sessions. It tells you how much movement budget today has left.
CBDRCentral Bank Dealing Range: A reference range (14:00–20:00 ET) whose size is projected in standard deviations.
Initial BalanceIB: The range of RTH's first hour. A narrow IB anticipates a trend day: the energy was not spent there.
Killzone: A high-probability time window. MCI's main one is 09:30–11:00 ET.
Lunch traptrampa del mediodía: The lunch pattern (12:00–13:00): institutional volume steps away and price breaks falsely on both sides. Not traded. Not to be confused with ICT's Venom Model.
Macro: A ~20-minute burst in which the algorithm reliably hunts liquidity (09:50–10:10, 10:50–11:10…).
Macro data daysCPI · NFP · FOMC: The announcement candle sweeps both sides: it is not information, it is a stop harvest. No positions inside it; its extremes remain as pools.
MOCMarket on Close: 15:50–16:00: mandatory closing orders arrive that follow no technical logic. Not traded.
ORGOpening Range Gap: The gap between yesterday's RTH close and today's open. A magnet, just like an NDOG.
Rolloverquarterly expiry: Mar/Jun/Sep/Dec. The continuous chart stitches different contracts and SHIFTS levels marked earlier.
Seek & Destroy: A day profile that sweeps BOTH extremes without delivering any direction. With both sides taken before 10:30, you do not trade.
Standard deviationSD · projection: The height of the CBDR — or of Asia — projected in ×1, ×2, ×3 multiples. It gives the day's travel budget.
TGIF: Friday's tendency to give back part of the weekly range. A bad afternoon to chase the extension.
True opens: The reference opens: daily (00:00 ET), weekly (MCI uses Monday 00:00 ET; Quarterly Theory places it Monday at 18:00), monthly (2nd Monday) and yearly (1st Monday of April). What matters is having one fixed anchor per scale and being consistent.

VIThe core playLondon range → NY sweep

LRH / LRLLondon Range High/Low: The extremes of the London range. They are the bait and the target of the core setup.

VIIEntry modelsThe named setups, one by one

2022 Model: The four-step skeleton: raid → displacement with FVG → entry on the retracement → delivery to the opposite pool.
DXYdollar index: The reference the rest of the board is read against. On indices you consult it, you do not trade it.
IOFEDInstitutional Order Flow Entry Drill: Entry at the far edge of the FVG: better price and a smaller stop, at the cost of filling less often.
Judas Swing: The session's first push runs opposite to the real move, to load liquidity on the wrong side.
MMBM / MMSMMarket Maker Buy/Sell Model: The full reversal: consolidation, sweep, a long manipulation the other way, Smart Money Reversal and distribution.
MMMMarket Maker Model · Smart Money Reversal: The market maker's full reversal model: accumulate, manipulate, distribute and reaccumulate.
OTEOptimal Trade Entry: A 62–79% retracement of an impulse. A CONTINUATION model: it demands the trend on your side.
Power of ThreePO3 · AMD: Accumulation → Manipulation → Distribution. The shape of every session, fractal at every scale.
Rate differential: The yield gap between two economies. It sustains multi-month trends with shallow retracements.
Relative strength: Which of two correlated instruments is leading. In continuation you side with the strong one.
Risk-on / risk-offRORO: The risk-appetite regime. A context filter that confirms or questions your bias, never an entry signal.
Silver Bullet: An hourly model: within 10:00–11:00 ET the algorithm leaves an FVG that gets rebalanced. There is an afternoon version.
Smart Money ReversalSMR: The real extreme where the Market Maker Model's manipulation ends and distribution begins.
SMTSmart Money Technique · divergence: One index sweeps its extreme and the other does not. It gives away that the sweep was manipulation; you trade the strong index.
Turtle Soup: Fading a false break: price takes out an obvious extreme, fails to get acceptance and comes back inside. You enter on the reclaim. Not ICT's: Raschke and Connors created it (Street Smarts, 1996); ICT reframes it as sweeping a swing point on any timeframe.
Unicorn: A breaker and an FVG overlapping at the same price: two independent reasons to react there.
Venom Model: A 2025 ICT model: the 08:00–09:30 ET box is swept at the open and price reverses. Same skeleton as the MCI core with a different range.

VIIIRisk managementThe arithmetic that keeps you alive

Break-evenBE · stop at entry: Moving the stop to your entry. It is justified when STRUCTURE advances, not when you are +1R: otherwise it takes you out of normal retracements.
COTCommitment of Traders: The CFTC's weekly report. Commercials (informed), large speculators (trend followers) and retail.
Esperanza matemáticaexpectancy: Average R per trade: (win rate × average win) − (loss rate × average loss). It is the only thing that decides whether a method wins long term, which is why a 40% win rate at 1:3 earns more than 70% at 1:1.
Open interestinterés abierto: Live contracts. Rising with price = new money; falling with price = positions closing, a move with no base.
Partialscaling out: Closing part of the position. It trims expectancy and buys staying power: it is a psychological tool.
Point value: What one point per contract is worth: ES $50, MES $5, NQ $20, MNQ $2. It defines how many times you can be wrong.
Position sizesizing · tamaño de posición: Risk ÷ (stop in points × point value), rounding down. It is derived from the stop, never the other way round.
Rrisk multiple: The unit of measurement: 1R is what you lose if the stop is hit. Everything is measured in R, not in currency.
Structural stop: A stop is not a distance: it lives where the idea dies, beyond the extreme of the sweep.
T1 / T2 / runner: A three-part exit: near target (≥1R), main pool (the DOL) and the remainder with the stop trailing structure.
Time invalidation: Closing because the expected move has not arrived in its window, even though the stop was never hit.

IXOrder FlowBookmap: the layer that confirms the chart — or denies it

Absorption: Massive aggression against passive liquidity that does NOT move price. Strong delta with price standing still means someone big is on the other side.
Delta: Buy aggression minus sell aggression. Its divergence — a new extreme on less delta — signals exhaustion.
Iceberg: An order that reloads at the same price every time it gets eaten: invisible absorption in the book.
Spoofing: A large, visible wall that is PULLED before it is touched. Fake liquidity: never fade a wall because of its size.
Stacking / Pulling: Adding liquidity at a level (stacking → usually real) or pulling it as price approaches (pulling → fake).
Trapped tradersatrapados: Those who entered a breakout that got absorbed. Their stops are the fuel for the move the other way.

XPsychologyProtocol, not motivation

A/B/C execution: The grade for HOW you decided, independent of the result in R. A trade can be an A and lose, or a C and win.
Blind backtest: Stepping candle by candle from a past date, deciding only on what is visible. The only one that does not fool you.
Correct loss: A trade with an A setup, size by formula and a structural stop that got hit. Indistinguishable from a winner except in the outcome.

XIAlgorithmic theoryHow the algorithm delivers price

Buy / sell curvecurva de compra · curva de venta: Delivery seen as accumulation or distribution rather than as trend. Accumulation happens while price is still falling.
Conditioning: The market repeats a pattern until you take it as a rule, and then inverts it.
Institutional sponsorshippatrocinio institucional: The proof a level was defended is not that price stopped: it is that it left with displacement, leaving inefficiency behind.
IPDAInterbank Price Delivery Algorithm: The idea that price is delivered by an algorithm referencing 20/40/60-day data ranges.
Market maker trapstrampas del creador de mercado: Famous retail patterns — flags, head and shoulders, trendlines — built to generate counterparty.
Narrative: The chain context → DOL → manipulation → execution, in one sentence. If you cannot say it, you have no thesis.
Order Pairingorder pairing: The underlying mechanic: a large order only fills against opposing liquidity, so the counterparty has to be manufactured first.
Quarterly shift: Every 3–4 months IPDA re-references its data ranges. Many underlying turns are born there.
Quarterly Theory: Time divides into fractal quarters, each with its phase: accumulation, manipulation, distribution, continuation.
True day open: The midnight open (00:00 ET). It splits the day into premium and discount.

XIIFunded-account managementTrading a funded account without blowing it

Consistency rule: A cap on how much your best day can weigh in total profit. It forces you to earn steadily.
Drawdown: The fall from your equity peak. In funded accounts it is usually trailing: it chases your high-water mark.