The ICT 2022 Model: Liquidity Sweep, Displacement & FVG Entry, Step by Step

The ICT 2022 model is a price-action trading framework taught by Michael J. Huddleston (the Inner Circle Trader) in his 2022 mentorship. It sequences five components — a liquidity pool, a liquidity sweep, a market structure shift, displacement, and a fair value gap entry — into a repeatable setup that aims to enter at the moment institutional order flow commits to a direction, targeting opposite liquidity for high reward-to-risk.

Five, in order: (1) a liquidity pool of resting stops above a high or below a low, (2) a liquidity sweep that raids those stops and rejects, (3) a market structure shift that breaks opposing structure, (4) displacement — a strong one-directional move — that causes the shift, and (5) a fair value gap left by that displacement, which becomes the entry zone.

After the sweep and market structure shift, place a limit order in the fair value gap left by the displacement. Conservative entries use the FVG midpoint (consequent encroachment); aggressive entries use the far edge for a better price at a lower fill rate. The stop sits just beyond the sweep wick and the target is the opposite liquidity pool.

The model is most commonly executed on lower timeframes (1-minute to 15-minute) for entries, with higher-timeframe bias set on the 1-hour or 4-hour chart. The key is aligning the entry with the higher-timeframe draw on liquidity rather than trading the pattern in isolation.

Inside the ICT kill zones — London Open (02:00–05:00 EST), New York AM (07:00–10:00 EST), London Close (10:00–12:00 EST), and New York PM (13:30–16:00 EST). These windows concentrate institutional volume and produce the most reliable liquidity runs. The same pattern outside these windows is lower probability.

Displacement is a strong, one-directional price move made of large-bodied candles that breaks structure and leaves an inefficiency (a fair value gap) behind. It signals institutional conviction. Weak, overlapping, small-bodied candles are not displacement and invalidate the setup because they leave no clean FVG to enter.

The 2022 model is essentially the break-of-structure entry from Smart Money Concepts with strict filters added: a mandatory liquidity sweep before the entry and a displacement requirement to validate the structure shift. SMC is the broader vocabulary; the 2022 model is one specific, mechanical way to trade it.

Because the stop sits at the sweep wick and the target sits at distant opposite liquidity, textbook setups routinely offer 3:1 to 5:1. Actual results depend on fill quality — if price only taps the fair value gap edge before running, aggressive far-edge entries can miss, so traders should track their personal fill rate before trusting the headline ratio.

Yes. The model is market-agnostic because it is based on liquidity and order flow, which exist in any market with participants and stop orders. It is widely applied to forex majors, index futures, and major crypto pairs. The kill-zone timing is anchored to the forex/US-session clock, so crypto traders often adapt the windows to the sessions that move their pair.

Just beyond the sweep wick — below the low for a bullish setup, above the high for a bearish setup. That point is the price level that, if broken, proves the sweep was not a reversal. Widening the stop past the sweep to 'give it room' destroys the tight-risk premise that makes the model's reward-to-risk attractive.

A liquidity sweep (or stop hunt) is when price spikes past an obvious swing high or low to trigger the stop orders resting there, then rejects and reverses. It is the trigger for the whole model — the raided stops become the counterparty for the institutional position, fuelling the displacement that follows. No sweep means no valid setup.

The individual components — liquidity levels, sweeps, displacement, and fair value gaps — can each be detected algorithmically, and tools like the QuantumAlgo indicator surface them automatically on TradingView. Full end-to-end automation of the entry decision is harder because it requires judgement on higher-timeframe bias and clean target selection, which most traders still confirm manually.