Trading reference

Mitigation, in ICT and smart-money trading, is price returning to an area it previously left behind — typically an order block or a fair value gap — so that positions opened in that area can be offset before price continues in its intended direction.

Displacement is an aggressive, one-directional move away from a level that travels far enough and fast enough to leave imbalance behind it — and in ICT-style trading it is the evidence that a preceding liquidity sweep was meaningful rather than incidental.

Optimal Trade Entry, usually shortened to OTE, is the retracement zone — conventionally between the 62% and 79% Fibonacci levels of an impulse leg — where ICT-style traders look to enter in the direction of the move that created that leg.

Inducement, abbreviated IDM, is the obvious pool of liquidity sitting between current price and a higher-timeframe point of interest — usually the high or low of the last minor pullback — which price takes first, so that the traders positioned there supply the orders needed for the move into the real level.

Premium and discount are the two halves of a defined price range, split by its 50% midpoint — the equilibrium. Price trading above equilibrium is at a premium and is considered expensive relative to that range; price below it is at a discount and is considered cheap. The convention is to look for sells in premium and buys in discount.

SMT divergence is a disagreement between two correlated markets at the same moment: one market takes out a prior high or low while the other fails to, signalling that the move was a liquidity raid rather than genuine expansion. It is used as confirmation that a sweep has occurred, not as an entry signal on its own.