Definition: price returns to the FVG (C1 high to C3 low) created by a displacement candle to fill the orders the velocity left unfilled. Evidence: on the 5M, the displacement leaves the gap, price delivers 15–20 pips, then retraces to the zone; the CE — the densest order concentration — is where the reaction occurs and the delivery resumes. Application: the FVG CE is the primary Model 1/2 limit price; the rebalancing to it is the re-entry opportunity for everyone who didn’t fill at the displacement. Limit at the CE, stop below the far boundary (C1 high) minus 2–3 pips, target the primary ERL. Mitigated when: a candle closes beyond the far boundary — below the C1 high for a bullish FVG — meaning the zone’s orders are fully filled and it holds no further institutional interest.
Definition: price returns to the OB — the last opposing-direction candle before an impulse — to activate the accumulation orders placed during its formation; those orders become the support (bullish OB) that limits the retracement. Evidence: daily context — a bearish daily OB precedes a bullish impulse; price delivers 2–3 days, retraces to the OB zone, consolidates at the OB CE or high, and resumes. Session context — the last bearish 5M candle before the MSS becomes the 5M OB. Application: swing — limit at the daily OB CE after the weekly Judas + MSS confirm direction, stop below the OB low minus 2–3 pips, target PWH/PMH. Session — if price passes through the FVG into the underlying OB, the 1H OB CE becomes the alternative entry when the 5M FVG CE was not filled. Mitigated when: price closes below the OB low on the OB’s own timeframe; a partial mitigation (zone entered, no close below) retains interest at the OB low.
Definition: after a large-range candle or series, the algorithm rebalances the range itself — returning to its 50% midpoint before the next leg. Not the FVG or OB within the range: the range’s own CE. Evidence: a 150-pip bullish weekly candle is followed the next week by a retrace to its midpoint (75 pips off the low) — the prior week’s CE; same pattern on strong daily candles. This is the dealing range rebalancing at candle scale. Application: the least precise of the three — used when no FVG or OB exists within the retracement range. Mark the prior candle’s 50%, require a reaction plus a 1M/5M CHoCH before entering, stop below the level at normal structural distance. Complete when: price trades at and through the midpoint without reaction — the range is then considered balanced.
| Characteristic | Redelivery | Reversal | How to distinguish |
|---|---|---|---|
| Candle character | Small-body, overlapping accumulation candles inside the zone — the zone is respected | Increasingly bearish momentum candles with larger bodies — the “retracement” looks like a bearish continuation | Large bearish bodies passing through the zone ≠ redelivery. Small overlapping candles stopping at the CE = redelivery. |
| Wick character | Wicks extend into the zone; closes return to or above the CE — tested and respected simultaneously | Candles close below the far boundary (C1 high) — mitigated, not rebalanced | Close below the far boundary = mitigation. Close within or above the zone = potential rebalancing. |
| Volume (indices) | Decreasing into the zone — institutional buys absorbing the pullback | Increasing as price falls through — genuine selling conviction | On NQ/ES: falling volume into the zone = redelivery setup; rising volume = potential trend change. |
| HTF structure | Daily/weekly structure remains bullish — no daily CHoCH; the AMD direction is intact | The higher timeframe has formed a CHoCH — the retracement is part of a reversal | Check the daily for a CHoCH before labelling any 5M move “rebalancing” — a 5M retracement within a daily CHoCH is a reversal. |
| Retracement depth | To the FVG CE or OB CE — ~50% of the displacement — and holds; typically does not exceed the far boundary | Through the far boundary — full mitigation — and continues lower without reaction | 50% to the CE = rebalancing expected; 100%+ through the far boundary = mitigation. |
| Structural signal after the zone | A 1M or 5M bullish CHoCH forms after the zone is touched — the confirmation the redelivery is beginning | No bullish CHoCH forms — price continues lower through the zone | Wait for the 1M bullish CHoCH after the zone entry before confirming; entry before it is premature. |
The 02:33 EST MSS candle creates FVG 1 (C1 high to C3 low) and Phase 3 begins; price rises ~12 pips before the first rebalancing. Action: the standard Model 1 setup — the limit sits at the FVG 1 CE, stop below the FVG 1 far boundary.
Price retraces to the FVG 1 CE; the resting institutional limits fill; a 1M bullish CHoCH confirms; delivery resumes. The most common and most traded rebalancing in the session model. Action: the limit fills, the 1M CHoCH provides the LTF confirmation, and the delivery to the IRL (PDH) begins from this point.
Phase 3 accelerates: a second displacement delivers ~20 pips from the FVG 1 CE, creating FVG 2 at a higher level — the second round of institutional order placement. Action: FVG 2 is a potential re-entry for missed fills or adds — a secondary zone, lower probability than FVG 1 because Phase 3 is more advanced.
Typically smaller than the first — retracements shallow out as the ERL approaches. Action: the first partial may already be taken if the IRL was touched; the FVG 2 CE becomes the trail-stop reference for the remaining runner.
The delivery completes at the PDH — the BSL pool above it is swept and the next AMD cycle begins. Action: final 50% profit at the PDH minus 2 pips; close everything. The PDH sweep is the next cycle’s beginning, not a re-entry for this one (the kill zone ends at 05:00 EST).
| Outcome | Price behaviour | What it means | ICT response |
|---|---|---|---|
| Full rebalancing (CE fill) | Retraces exactly to the FVG/OB CE, reacts with a 1M CHoCH, reverses with the delivery | The maximum order concentration at the CE has been filled; the zone is partially used, boundaries intact | The standard limit entry: the fill lands, the CHoCH (within 1–3 candles of the touch) confirms, hold to the IRL/ERL. |
| Partial rebalancing (25–50% of the zone) | Enters the zone but reverses before the CE | Demand strong enough to reverse the retracement at the boundary — extreme institutional conviction | A no-fill session, not a lower-quality entry invitation. Never chase above the CE. Journal: “Partial rebalancing — strong demand signal.” |
| Overshoot (through the CE to the far boundary) | Wick reaches the far boundary; the close stays within or above the zone | The full zone depth has been tested but not mitigated — orders activated at both the CE and the boundary | The stop (boundary minus 2–3 pips) has not triggered; the CE limit likely filled during the wick. Assess the close: inside = valid, beyond = mitigated. |
| Mitigation (close beyond the far boundary) | Closes below the C1 high (bullish FVG); the zone fully absorbed | All resting orders filled; the zone loses its support function — the structural invalidation | The stop has triggered: accept it. Record as a Type 1 statistical loss (process clean) or Type 2 execution error (stop misplaced). Never re-enter at the mitigated zone. |
Lio has traded ICT and Smart Money Concepts on forex majors and US indices since 2021 and built LiquiditySweeps.com to teach the framework the way it should be learned: in sequence, on real charts, with free live tools instead of paid indicators. Every article on this site follows the same rule — nothing gets published that wouldn’t survive a trade review.
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