Smart Money Concepts & ICT Tools, Explained for Coders
BOS, CHoCH, order blocks, FVGs, liquidity, AMD — what each concept actually means in code and how to detect them reliably.
Smart Money Concepts and ICT terminology can feel like a different language. As a developer, your job is to translate fuzzy chart patterns into clear, testable rules. Here's how the core concepts break down.
Break of Structure (BOS) is a confirmed move beyond the most recent swing high (in an uptrend) or low (in a downtrend). In code: track swing pivots, then flag the first close that exceeds the prior swing in the trend direction.
Change of Character (CHoCH) is the first opposite-direction BOS after a trend — the earliest sign of reversal. Detection is identical to BOS but in the counter-trend direction.
Order blocks are the last opposite-color candle before an impulsive move that broke structure. Fair Value Gaps (FVGs) are three-candle imbalances where candle 1's wick and candle 3's wick don't overlap.
Liquidity sits at equal highs/lows and prior session extremes — areas where stops cluster. Sweeps occur when price wicks through and reverses. The AMD model (Accumulation, Manipulation, Distribution) chains these concepts into a full session narrative.
Detecting these reliably requires careful pivot logic, mitigation tracking (was the OB tapped?), and clean visualization. Done well, an SMC tool becomes the single most powerful piece of confluence on a trader's chart.
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