ICT Decoded · Phases of Price: Consolidation, Expansion, Retracement, Reversal
What Are the ICT Phases of Price?
By Steve H — reads every firm’s official rulebook, checks prices and codes daily, and maintains the Enigma Score · Methodology · Editorial policy · Last updated November 1, 2026
ICT concepts were created and are taught by Michael J. Huddleston, The Inner Circle Trader (X · YouTube). This lesson is FundedEnigma’s own summary, not affiliated with or endorsed by ICT.
In short: The ICT phases of price are the four kinds of move price makes: consolidation (a small sideways range), expansion (a fast one-sided move), retracement (a pullback that gives back less than half of the expansion) and reversal (a market structure shift against the expansion). Large ranges tend to be followed by smaller ones.
ICT Phases of Price Explained: Consolidation, Expansion, Retracement and Reversal (Real NQ Data) · 8:47 · published November 1, 2026 · part of the ICT Concepts Decoded playlist
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The full video is embedded above this article: ICT Phases of Price Explained: Consolidation, Expansion, Retracement and Reversal (Real NQ Data). This page is the written version, with every chart walked through step by step. Jump to any part of the video:
Key facts: the phases of price at a glance
| Phase | How we define it (15-minute chart) | What it tells you |
|---|---|---|
| Average candle | The average range of the last 14 candles | The yardstick for every rule below |
| Consolidation | The last 8 candles fit inside 2 average candles | A small range: no leg to read; the question is which side gets taken |
| Expansion | The last 3 candles moved at least 2 average candles net one way and left a fair value gap | A fast, one-sided move with small pullbacks |
| Retracement | A move back against the last expansion that has given back less than half of it | A slower pullback inside the move |
| Reversal | A market structure shift against the last expansion: liquidity taken, then the swing before it traded through | The move may be turning; watch for expansion the other way |
Last verified 2026-11-01. All charts below are real historical CME NQ futures data, shown in New York time.
Here is the idea on a real chart. On March 2, 2026, Nasdaq futures went through all four phases in one session. Price went sideways, ran almost 500 points, pulled back part of the way, and late in the afternoon turned.
What are the four phases of price in ICT?
ICT (Michael J. Huddleston) describes price delivery in four phases: price builds a range, breaks out of it, pulls back, and at some point turns around.
- The big idea is the rhythm. In ICT's model, large ranges are followed by small ranges, and small ranges by large ones; on our data only the first half held up (after a box, bigger candles came no more often than usual). A consolidation builds a balance point, its equilibrium; an expansion leaves it.
- The phase is a description. Knowing it doesn't tell you what comes next. It tells you what kind of move you are looking at, and what would change it.
How do you tell which phase price is in?
In this lesson we define each phase on the 15-minute chart, so it can be tested on real data. An average candle means the average range of the last 14 candles.
- Consolidation: the last eight candles fit inside a range of two average candles or less.
- Expansion: the last three candles moved at least two average candles one way, and left a fair value gap.
- Retracement: a move back against the last expansion that has given back less than half of it.
- Reversal: a market structure shift against that expansion. Liquidity is taken, then the swing before it is traded through.
What is consolidation in trading?
A consolidation is a small range: here, eight 15-minute candles inside two average candles. Inside a box like this there is no leg to read. The question is which side gets taken.
- On March 2, from 4:15 to 6:15 AM, eight candles stayed between 24,610.25 and 24,684.50, about one and a half average candles from top to bottom.
- At 6:33 AM price traded above the box, up to 24,729.00 at 6:49.
- At 7:56 AM it traded below the box's low as well. Both sides were taken before the 9:30 AM expansion.
What happens after a consolidation breaks?
On our data, the first break of a box was close to a coin flip. The first break ran a full box height beyond the box about four times in ten; about four times in ten, price traded the other edge first. After a box broke, price came back to the box's halfway point later the same session about four times in five. The first break, on its own, does not tell you the direction.
What is expansion in ICT?
An expansion is a fast, one-sided move: big bodies, small pullbacks and very little time spent going the other way.
- At 9:30 AM, from a low of 24,605.00, price ran.
- By 10:13 AM it reached 24,947.75: about 343 points in three candles, almost five average candles, with a fair value gap left behind.
Are large ranges followed by small ranges?
Yes, on our data. After an expansion, the next four candles were smaller on average than the expansion's candles about seven times in ten. For any three candles in the same hours, that happened less than half the time. The other half of the rhythm did not show up: after a consolidation box, the next candles were bigger no more often than after any eight candles. A quiet box did not tell you when the next big move would come.
What is a retracement in ICT?
A retracement is a move back against the last expansion that has given back less than half of it. It is slower than the move it follows.
- After 10:15 AM price drifted back down to 24,842.00 at 10:36, about a third of the leg given back.
- That is less than half, so by our rule it is still a retracement. At 10:47 AM price made a new high at 24,958.50.
How deep is a retracement, and what does depth tell you?
On pullbacks that gave back a quarter to a half of a leg and then made a new extreme, price typically moved back at about half the speed of the expansion, in points per candle. Depth matters too. Of the pullbacks that gave back a quarter of the leg, about two in three reached half before any new extreme, but almost half of those did both inside one candle. When the quarter came in a candle of its own, half and a new extreme came first about equally often.
What is a reversal in ICT?
A reversal is a market structure shift against the last expansion: liquidity is taken, then the swing before it is traded through. On our data, only about three shifts in ten against an expansion were followed by an expansion the new way.
- The leg kept climbing into the afternoon. At 2:47 PM price traded 25,101.00, just above the previous day's high at 25,098.75.
- Buy-side liquidity was taken. Then at 3:11 PM price traded below the swing low of the 2:00 PM candle, at 24,966.25: a market structure shift against the expansion.
- The 3:15 PM candle kept going, down to 24,946.75: expansion, met by expansion the other way.
- Not every shift gets that far. Earlier the same morning, at 7:19 AM, price had shifted down after the London high was taken. By 8:25 AM it was back above 24,729.00. That shift failed.
Retracement vs reversal: how often does a shift turn the move?
A shift against an expansion was followed by an expansion the new way, before the old extreme traded again, only about three times in ten. About four times in ten, the old extreme traded first. A retracement stays under half of the leg with no shift; a reversal starts with the shift, and most of those shifts were not followed by an expansion the other way.
What does a full cycle look like on a real chart?
Example 2: a bearish cycle, January 2, 2026
- From 7:15 to 9:15 AM price sat in a tight box, about 35 points tall, between 25,673.75 and 25,709.00.
- At 9:15 AM it dipped below the box. At 9:30 AM it traded above it, and ran up to 25,803.75 at 9:50. Both sides taken again.
- At 10:12 AM price traded below the 9:30 AM candle's low: a bearish shift. Then expansion. By 11:12 AM price was at 25,293.75, 510 points below the high.
- The pullback reached 25,427.25 at 11:34 AM, about a quarter of the leg. Then price went sideways, and made a new low at 25,265.25 at 1:50 PM.
- The previous day's low (25,429.00) had been taken just before 11 AM. At 2:11 PM price traded back above the swing high of the 1:15 PM candle: a bullish shift. By the 2:30 PM candle the move up counted as an expansion, reaching 25,457.00 at 2:40.
What does the data say about the phases of price?
We ran the four rules on 527 days of Nasdaq futures, from June 2024 to September 2026, leaving out days with a contract roll nearby: 852 expansion legs and 1,140 consolidation boxes.
- Large ranges led to smaller candles: after an expansion, the next four candles were smaller about seven times in ten, against less than half for any three candles.
- Retracements were slower: typically about half the expansion's speed.
- A quiet box did not predict the next big move: after a box, the next candles were bigger no more often than after any eight candles.
- A box's first break was close to a coin flip, and after a break price came back to the box's halfway point later the same session about four times in five.
- A shift against an expansion was followed by an expansion the new way only about three times in ten.
How do you use the phases of price in your own charting?
Use the phase to describe the market, and let liquidity and structure give the reason.
- Name the phase and the timeframe. "Fifteen-minute consolidation between X and Y" says more than "it's choppy".
- Don't guess inside a box. Wait to see which side gets taken, and remember the first break is close to a coin flip.
- Read pullbacks by depth. Under half is still a retracement; past half, it no longer counts as a retracement by our rule.
- A shift is not yet a reversal of the move. Look for expansion the other way. The power of three lesson shows the same range, false move and expansion on a daily scale.
More concepts in the series are on the ICT Concepts Decoded hub. If you trade futures with a prop firm, you can look up a firm's rules on the challenges page or set two firms side by side on the compare page.
Frequently asked questions
What is the difference between a retracement and a reversal?
A retracement gives back less than half of the expansion, with no market structure shift against it. A reversal starts with a shift against the expansion: liquidity taken, then the swing before it traded through.
What comes after a consolidation?
On our data, either side. The first break of a box ran a full box height beyond it about four times in ten, and about four times in ten price traded the other edge first.
Do large ranges always follow small ranges?
No. Smaller candles after an expansion showed up about seven times in ten, but a quiet box was not followed by bigger candles any more often than usual.
Which timeframe should I use for the phases of price?
You can apply the same rules to any chart, but every number on this page comes from the 15-minute NQ chart, so we use it in this lesson to measure every phase the same way. Say which timeframe you mean.
Is a market structure shift enough to call a reversal?
It is the rule we use to name one, but most shifts against an expansion were not followed by an expansion the other way. Treat the shift as the start, not the proof.
Sources
- Concept: the phases of price delivery (consolidation, expansion, retracement and reversal), as taught by ICT (The Inner Circle Trader, Michael J. Huddleston), who originated them. The rules, examples and charts on this page are our own.
- Data: every chart and count are real historical CME Nasdaq-100 E-mini (NQ) futures data, shown in New York time.
- Video: ICT Phases of Price Explained: Consolidation, Expansion, Retracement and Reversal (Real NQ Data), FundedEnigma.
Last verified: 2026-11-01. Written by Steve H.
Disclaimer: This page is for education only and is not financial advice. Trading futures involves substantial risk of loss. Past price behaviour does not guarantee future results.
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