ICT Auto-Validated SMC

The ICT Auto-Validated SMC indicator provides an automated smart money concepts framework designed to filter out market noise by requiring specific validation criteria for institutional levels. It identifies high-probability order blocks, fair value gaps, and market structure shifts by enforcing rules such as liquidity sweeps, displacement requirements, and multi-factor confluence scoring.

Usage

The Usage section describes how the script can be used to identify institutional trading setups. Users can utilize the tool to visualize market structure (BOS/CHoCH), premium/discount zones, and validated entry areas like Order Blocks (OB) and Fair Value Gaps (FVG).

Market Structure and Validation

The indicator identifies swing and internal structure. A key feature is the requirement for validation: Order Blocks are only displayed if they are preceded by a liquidity sweep and followed by displacement (FVG). This ensures that only levels with institutional "intent" are highlighted.

Zone Confluence

The tool automatically detects overlaps between different concepts. For example, if an Optimal Trade Entry (OTE) zone (61.8%–78.6% retracement) aligns with a validated Order Block and a Fair Value Gap, the script labels this as "Triple Confluence," indicating a higher probability setup.

Trading Signals

Optional trade signals can be enabled, which fire only when a user-defined Confluence Score is met. This score is calculated based on factors like Higher Timeframe (HTF) alignment, Killzone timing, and price interaction with validated zones.

Details

The script is built around the core principles of ICT (Inner Circle Trader) and Smart Money Concepts. It uses several advanced logic gates for its output:

• Displacement Filter: FVGs are only qualified if the candle body size exceeds a specific multiple of the Average True Range (ATR), ensuring only impulsive moves are captured.
• Dynamic Lifecycle: Breaker Blocks and Inversion FVGs (IFVGs) have active lifecycles. A Breaker is formed when an OB is traded through; it activates on the first retest and expires if price moves through it again.
• Liquidity Sweeps: The script monitors Equal Highs (EQH) and Equal Lows (EQL) and marks "Sweeps" when price wicks beyond these levels and closes back within the range.
• No-Repaint HTF: The Higher Timeframe alignment feature uses confirmed bars only to ensure that the directional bias does not shift after the fact.

Settings

Market Structure

• Swing Length: Determines the number of bars on each side required to confirm a pivot.
• Internal Structure Length: Sets the sensitivity for sub-structure detection.
• Require Body Close: When enabled, BOS/CHoCH requires a candle body close rather than just a wick.

Order Blocks & FVGs

• Require Liquidity Sweep: Filters OBs to only show those that took out previous liquidity.
• Min Displacement (ATR Multiple): Sets the threshold for how impulsive a move must be to create a valid FVG.
• Show Inversion FVGs: Toggles the display of "flipped" gaps that act as support/resistance.

Confluence & Signals

• Min Confluence Score: The threshold (2-10) required to trigger a trade signal.
• Require HTF Alignment: Filters signals to only trade in the direction of the higher timeframe trend.
• Signal Cooldown: Prevents multiple signals from firing while price lingers in a single zone.

Killzones

• Asian/London/NY AM/NY PM: Toggles time-based shading for specific institutional trading windows in EST.

FAQ

How is the Confluence Score calculated? The score is additive: touching an OB (+2), OTE (+2), FVG (+1), or Breaker (+1), plus extra points for HTF alignment, Killzone timing, and Premium/Discount positioning.

What is the "Balanced Price Range" (BPR)? A BPR is a rare zone where a bullish FVG and a bearish FVG overlap, representing an area where price has been efficiently delivered in both directions and often acts as strong support or resistance.

How do I access this indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.