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Deep Dive Dealing Range

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Damien Johnston edited this page Feb 10, 2023 · 1 revision

Dealing Range Context:

  • Dealing Range (DR) is the high and low of the dominate or parent price swings that price is currently trading within.

  • Create a fib tool with the following settings. 0.0, 0.25, 0.5, 0.75, and 1.0.

  • Everything above 0.5 is considered a Premium Market, below is considered a Discount Market.

  • Measuring DR gives us a deeper understanding of price action in a context of time and balanced delivery.

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  • Market Makers view 0.5 of a dealing range as fair value. Trades near this level are low probability.

  • Smart Money will trade the extremes of the range +0.75 or -0.25, with an understanding that price will be driven to the other side of 0.5.

  • As ICT traders our ideal trades are with Smart Money, we want to trade short at +0.75 an long at -0.25.

  • The algorithm will gyrate back and forth between liquidity pools of the range offering price in both markets until a planned news event or random event causes one sided delivery.

  • Fair Value to Discount or Premium

  • Discount or Premium to Fair Value

  • Rinse and Repeat

  • This is not a ridged set of rules, more of an understanding of what is in play within a range. Low probability trades should be managed carefully, and may generate smaller moves. High probability trades will typically generate bigger moves.

  • IDPA Look back is three Dealing Ranges at the Daily time frame resolution 20, 40, and 60 days back. They are used as data points by the algorithm. Understanding where price is within these ranges is very helpful for us as ICT students.

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