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In the world of financial markets, technical analysis has evolved beyond simple trendlines. One of the most discussed methodologies in 2026 is the Inner Circle Trader (ICT) strategy. For students and independent researchers looking to understand price action, mastering concepts like Fair Value Gaps (FVG) and Market Structure is essential for reading the "story" behind the charts.

1. What is Market Structure?

Before looking for specific entries, a trader must identify the current market bias. Market structure is defined by the sequence of Higher Highs (HH) and Higher Lows (HL) in an uptrend, or Lower Highs (LH) and Lower Lows (LL) in a downtrend. A "Break of Structure" (BOS) is the first signal that a trend may be ending, allowing researchers to anticipate a shift in institutional order flow.

2. Understanding the Fair Value Gap (FVG)

A Fair Value Gap occurs when there is an imbalance in price delivery. On a candlestick chart, this is seen when the wick of the first candle and the wick of the third candle do not overlap, leaving a "gap" in the middle candle.

• Why it matters: Institutional algorithms often treat these gaps as magnets, eventually returning to "fill" the imbalance before continuing in the original direction.

• How to use it: Traders look for price to return to an FVG inside a "Premium" or "Discount" array to find high-probability entries.

3. Order Blocks (OB) and Liquidity

ICT teaching emphasizes that price moves from one area of liquidity to another. Order Blocks are specific candles where large institutional players have placed their orders. By identifying where "buy-side" and "sell-side" liquidity rests (often above old highs or below old lows), traders can predict where the market is likely to move next.

4. The Importance of Backtesting

Like any scientific research, trading strategies require rigorous testing. Utilizing your skills in data analysis and software like Python or Stata, you can backtest ICT concepts to see how often an FVG is filled before a market reversal. This data-driven approach transforms trading from guesswork into a structured research project.

Conclusion

Mastering the ICT methodology requires patience and a deep understanding of market psychology. By focusing on Fair Value Gaps and Market Structure, you can begin to see the footprints of large institutions in the market. As always, remember that trading involves risk, and continuous study is the only way to build long-term success.