Introduction

I am @ronload, co-founder of the Kaiyn Capital community. As of August 1, 2024, I have been trading with the ICT/SMC framework for roughly half a year. Before that, my trading was mainly based on traditional Price Action. Kaiyn Capital has been operating for about a year, and I believe many people in the group have already seen my trading performance, so I will not spend too much time on that here.

The purpose of this tutorial is to help people who are interested in ICT/SMC learn the system in a structured way and actually understand it. Most free and paid courses in the Chinese-speaking trading space only explain these ideas at a surface level. As a result, many beginners start trading without a clear understanding of what they are doing. A complete and logically consistent trading framework cannot be explained in a few words, especially when it is derived from price action. ICT/SMC is actually a branch of price action theory.

If you plan to use this tutorial to learn ICT/SMC and start your trading journey around it, please stick with it until the end. Like many trading frameworks, ICT/SMC is a complete and logically consistent system. Many early concepts need to be expanded by later material, and later material depends on the early concepts to make sense. If you only learn basic concepts such as FVG, OB, or some standardized entry models, then rashly put your capital into the real market, you will miss the entire point of this tutorial.

Finally, if you do finish the entire tutorial, make sure you combine the framework with proper position sizing and risk management when trading live. Without position sizing, every trading theory is just talk on paper. Remember: a 50% drawdown requires a 100% gain just to recover.

If you run into questions while learning, feel free to join the Kaiyn Capital community and ask:

X / Twitter: https://x.com/kaiyncapital

Telegram community: https://t.me/kaiyncapital

ICT/SMC Core Axiom

ICT/SMC is a trading framework proposed by The Inner Circle Trader. It is built on the following axiom:

Price movement does not depend on support and resistance. So-called support and resistance are only market illusions. Every price movement in the market is controlled behind the scenes by an invisible hand known as the Interbank Price Delivery Algorithm (IPDA).
Smart Money in the market, such as banks and financial institutions, controls price through IPDA in order to extract liquidity from speculative money, or retail traders.
Smart Money holds large amounts of inventory and can easily guide price. However, large capital needs a large amount of opposing orders to fill. For that reason, IPDA guides price toward areas where large pools of orders exist. These areas usually include:

Retail stop-loss order pools. These areas are called Liquidity.
Areas where Smart Money has placed orders but not yet been filled. These areas are called Imbalances.

Price only moves toward liquidity and imbalances.

If we want to profit in the market, we should follow Smart Money's footsteps instead of copying retail trading behavior.
The relationship between price and time is extremely important during the trading day.
ICT/SMC can be applied to any market with sufficient liquidity, which means you probably do not want to use this framework on extremely illiquid micro-cap tokens.

These are the background axiom you need before learning ICT/SMC.

These axiom are important and will come up repeatedly as we explain the concepts that follow. In my view, however, ICT/SMC is only one of many trading frameworks. It is simply one way to explain the market. In reality, every trading theory explains the market through its own logic, while I personally believe that the market itself is not truly explainable. The so-called algorithm may not even exist. Do not believe everything just because it is written down. You can use these axiom to understand ICT/SMC, but you do not have to use them to explain the entire market, and you definitely should not use them to play down other trading frameworks. Remember that ICT/SMC is only one branch of price action. There is no need to over-deify it. Any framework that helps you make money is a good framework.