SMC ICT Checklist: 20 Steps to Validate a Setup Before You Enter

You know the terms — liquidity, sweep, inducement, CHoCH, BOS, order block, FVG — and you still lose. The problem is almost never vocabulary. It is that most traders use each term in isolation: see an OB, enter; see an FVG, assume it fills; see a wick sweep a high, short it; see a close above a high, buy it. That is hunting for reasons to justify a trade you already want, instead of reading what price is actually doing. This SMC ICT checklist fixes that by turning Price Action, SMC, and ICT into one repeatable 20-step plan you run before every entry — with the interactive validators and printable forms to make it stick.

Before anything else, a systematic plan has to answer five questions. If you can't answer all five, the plan isn't finished — no matter how pretty the zone looks:

Step 1 — Price Action is the base, not the decoration

Price Action doesn't mean memorising every candle name. It means reading price behaviour: what kind of highs and lows are forming, where candles close, whether a break follows through or gets pulled back, whether a move is impulsive or a messy stack of overlapping bars, and how price reacts when it reaches a key zone. SMC and ICT are just frameworks that organise what you see — the thing you actually read is price. So don't open with "where do I buy?" Open with "where is price in the big picture, and what is it trying to do?"

Step 2 — Read market structure first

Before you look for a single OB or FVG, classify the structure:

• Uptrend — higher highs, higher lows, buyers in control.
• Downtrend — lower lows, lower highs, sellers in control.
• Range — swinging in a box, neither side holding a break; the middle rarely offers an edge.

Here is where most traders blow it: they see M1 or M5 break one minor high and flip their entire bias, while H1 is still clearly bearish. Separate the two:

• External structure — the big swings, for the main picture.
• Internal structure — the smaller swings inside a big swing, for timing entries.

Internal structure can turn up while external structure is still down — it may just be a pullback before continuation. Never use a tiny internal break as a reason to flip the whole view. (More on this in multi-timeframe entry.)

Step 3 — Give each timeframe a job

For daily gold planning, a clean set is:

• H1 — trend, main structure, bias.
• M15 — setup zones and intraday structure.
• M5 — the confirmation and entry timeframe.

Scalpers might use M15–M5–M1; swing-leaning traders H4–H1–M15. The principle is fixed: the big TF gives direction, the middle TF gives the area to wait in, the small TF gives the trigger. Pick your set before the session and keep it all day — don't open ten timeframes and then look only at the one that agrees with the trade you want.

Step 4 — Map the dealing range: Premium, Equilibrium, Discount

Take your meaningful swing (low to high, or high to low) and split it in half. The top half is Premium, the midpoint is Equilibrium, the bottom half is Discount. In a bullish bias you have the edge hunting longs in Discount, not chasing up in Premium; in a bearish bias you hunt shorts in Premium, not chasing down in Discount.

Set the bias and drag price through the range — notice how "where's my edge?" changes:

The rule that saves accounts: Discount is not a buy button, Premium is not a sell button. They are only where you're allowed to start watching. You still wait for liquidity, a reaction, displacement, and a structure shift. And the middle of the range, with no clear reason, is usually a pass — price can whip both ways and the reward-to-risk is ugly.

Step 5 — Where liquidity actually sits

In trader's terms, liquidity is where a pool of orders — stops and pending entries — is likely resting. Watch:

• above prior swing highs and equal highs (Buy-side Liquidity / BSL)
• below prior swing lows and equal lows (Sell-side Liquidity / SSL)
• previous day high/low, and session (Asia/London/New York) highs and lows

But liquidity is not a promise price will reach it, nor that a sweep must reverse. Price can do three things:

1. sweep it and reverse
2. close through it and continue
3. sweep it several times before choosing a direction

So you never enter just because price tapped liquidity — you read what happens after the tap. This is the core mechanic behind the liquidity sweep.

Step 6 — Inducement: the trap that makes you early

Inducement is a minor structure or level that lures traders in before price deals with the more important liquidity or point of interest. Price breaks a minor high, everyone sees a "BOS" and buys with stops under the minor low — then price runs that low, stops them out, and only then picks its real direction.

Not every pullback is inducement. Judge it against the HTF structure, the Premium/Discount location, nearby liquidity, the more important POI price hasn't reached yet, and the strength after the grab. If a clean-looking signal shows up too early while important liquidity still sits behind it, assume you may be the one being induced. See why price pulls back for the mechanics.

Step 7 — Sweep vs Break: the distinction that stops the slaps

A sweep pierces a level and gets pulled back inside — a liquidity grab. A break closes beyond the level with displacement and follow-through, and holds on the retest — genuine acceptance. Read them backwards and you short real breakouts and buy fake ones. Toggle between the two footprints:

Don't hard-code "wick = sweep, close = break." Weigh how significant the level is, how far price closed, whether there was follow-through, and whether the market accepted price beyond the level on the retest.

Step 8 — Displacement: momentum that means something

Displacement is a move that shows one side has clearly taken control: candle bodies larger than the prior range, little overlap, price leaving the zone fast, closing near the extreme, breaking a meaningful swing, and often leaving an imbalance / FVG behind. One big candle mid-range that breaks no structure and has no follow-through is just noise. Real displacement takes price out of its area and changes something in the structure.

Step 9 — CHoCH and BOS do different jobs

• CHoCH (Change of Character) — price breaks a meaningful structure against the current direction. A warning that behaviour may be shifting.
• BOS (Break of Structure) — a break with the controlling direction. Confirmation of continuation.

A clean bullish reversal reads like this:

CHoCH is a warning, not a confirmed reversal — especially a tiny M1 CHoCH against an H1 trend. Don't rush it.

Step 10 — OB and FVG are not buy/sell buttons

An order block is not simply the last red or green candle. A valid OB is the origin of a displacement strong enough to break meaningful structure — and it's more interesting when it sits in the right Premium/Discount location, overlaps HTF demand/supply, forms after a liquidity sweep, and hasn't been retested repeatedly. A fair value gap is a 3-candle imbalance marking where price moved fast — a place to watch for a reaction, not an automatic entry. Price may fill it fully, partially, tap and go, or never return.

So never enter just because price touched an OB or FVG. Ask: is the zone in the right location? What liquidity got swept before price arrived? Is there a PA reaction or displacement confirming it? Has the structure on your entry TF actually shifted? Zone without a trigger — watch. Trigger in the wrong place — pass. RR not worth it — pass, even if the direction is right. This is the same discipline as trading support and resistance the right way.

Step 11 — The unified entry model (the 11-point gate)

Everything above collapses into one ordered sequence. Run it top to bottom — and note that Invalidation and Risk are hard gates: without them you cannot size or exit a trade, so there is no trade. Check off a live setup and get a verdict:

Keep the printable version next to your charts:

☐ 1  BIAS          — HTF says which side has the edge
☐ 2  LOCATION      — Premium / Discount, not mid-range
☐ 3  LIQUIDITY     — pools marked above and below
☐ 4  SWEEP/BREAK   — price actually swept or broke a real level
☐ 5  DISPLACEMENT  — impulsive move out of the zone
☐ 6  STRUCTURE     — a meaningful CHoCH / BOS
☐ 7  RETEST        — price returned to the OB / FVG / origin
☐ 8  TRIGGER       — PA confirmation on the entry TF
☐ 9  INVALIDATION  — where the idea is wrong        (hard gate)
☐ 10 TARGET        — opposing liquidity / structure
☐ 11 RISK          — SL distance + lot fit account  (hard gate)

You don't enter because you saw an OB. You enter because you know where price is, whose liquidity it took, and what it's now confirming.

Steps 12–14 — Plan A (long), Plan B (short), and the real-break case

Plan A — long, when H1 holds an uptrend: wait for a pullback into Discount with HTF demand / a bullish OB or FVG; identify SSL (equal lows) beneath price; let price sweep the SSL; see bullish displacement; take a bullish CHoCH on M5; wait for the retest into the OB/FVG; enter on a PA trigger; stop under the sweep low; TP1 at the nearest internal high, main TP at BSL / the next swing high. If price never sweeps and just runs up — let it go. There's a setup tomorrow; your capital has to survive to take it.

Plan B — short is the mirror: H1 downtrend, pullback into Premium, HTF supply / bearish OB, BSL above, sweep, bearish displacement, M5 bearish CHoCH, retest, trigger, stop above invalidation, target SSL. If price closes above supply with real displacement, the short is cancelled — don't widen the stop, don't average in, don't pray.

Step 14 — when it's a real break, not a sweep: if price closes above the high with displacement, follows through, and holds the retest, don't fight it just because "it's gone far." Accept that BSL was taken, wait for the retest, confirm the new structure with a bullish BOS and a trigger, then plan continuation. You don't have to catch every top and bottom — you enter where there's an edge, not because you fear missing out (when to enter a trade).

Here's Plan A as a schematic — sweep the SSL, displace up, CHoCH, retest the OB, enter:

Steps 15–17 — No-trade, order placement, and survival

Step 15 — Plan C is "don't trade," and it matters as much as A and B. Stand aside when price is mid-range, the HTF and entry TF disagree, there's a sweep but no displacement, a small CHoCH hasn't broken a meaningful swing, price taps an OB/FVG with no PA confirmation, RR is gone, the SL has to be wider than your risk allows, high-impact news is near, spreads are wide, you've hit your daily loss limit, or you're tilted and chasing. Not entering isn't missing out — if the conditions aren't there, not losing money is a good outcome.

Step 16 — place Entry, SL, TP in the right order. Entry comes after the conditions are met, not before. The stop goes where the idea is wrong, not at a dollar amount you'd like to lose — never squeeze it into market noise. Correct order: find invalidation from structure → place the SL → measure entry-to-SL → size the lot from the money you'll risk. Targets should reference where price may actually go: internal liquidity, the next swing, equal highs/lows, previous day high/low, opposing external liquidity. A right idea with no room to the target is a setup you pass on.

Step 17 — survive first. Most accounts don't die from one bad read; they die from oversizing after a loss, averaging in, and revenge trading. Risk a small, fixed slice per plan (many start around 0.25–0.5% of equity, never more than you can genuinely accept losing), and combine total risk if you split into several orders — three entries at 0.5% each is 1.5% if they all stop together. XAUUSD contract size, tick value, spread, and minimum lot vary by broker: check your own symbol specification every time rather than memorising a fixed lot. This is the whole point of the survival-first mindset.

Steps 18–19 — The pre-trade plan form and a worked read

Step 18 — fill this before every order. If you can't complete Invalidation, SL, Risk, or the confirmation conditions, the plan isn't ready:

Asset / Date / Session:
TF for direction:        TF for setup:        TF for entry:

HTF structure:  up / down / range        Main bias:
Key swing high:            Key swing low:
Dealing range:             Price in:  Premium / Discount / mid

Liquidity above:           Liquidity below:
POI of interest:           What must price sweep first:

Plan A (long):
Plan B (short):
Plan C (no-trade when):

Trigger to wait for:
Entry zone:        Invalidation:        Stop loss:
TP1:        TP2:        Planned RR:
Risk per plan:        Lot size:        High-impact news?
Why this plan has an edge:

Step 19 — a full read, start to finish. H1 prints continuous HH/HL, so the bias is long. Price is pulling into Discount where H1 demand overlaps a bullish OB. On M15 you mark equal lows beneath price as SSL. You don't buy the demand tap — you wait for price to sweep the equal lows first. After the sweep, a bullish displacement candle closes back above the zone. On M5, price breaks a meaningful lower high — bullish CHoCH. You mark the OB/FVG at the origin of that push and wait for the retest. Price returns, prints a rejection, and you assess entry. SL goes under the sweep low (idea dead if it breaks); TP1 the nearest internal high, TP2 the BSL above the swing high; you check RR and size the lot to the SL distance. If instead M15 closes below demand and the swing low with displacement, Plan A is cancelled on the spot. That's planning: you know in advance what makes you act, what makes you wait, what makes you wrong, and what you'll risk.

Step 20 — What to journal (and Good Loss vs Bad Win)

A journal isn't "how many dollars." Before the trade log the session and news, HTF bias, liquidity/POI, the reason, entry/SL/TP, risk in money and %, planned RR, a screenshot, and your emotional state. After, log the real result in R after costs, whether you followed the plan, whether you chased or moved the stop out of fear, whether the loss was analysis or discipline, a closing screenshot, and one thing to adjust next time.

Hold onto this line:

Don't judge a system on 2–3 trades. Collect at least 20–30 planned setups, then check which setups and sessions suit you, your repeat mistakes, your average R, your plan-adherence rate, and whether losses came from the system or from breaking rules.