Dealing Range

Definition

A Dealing Range is the price range between the most recent significant Swing High and Swing Low that defines the current "playing field" for institutional price delivery. It establishes the boundaries within which the IPDA (Interbank Price Delivery Algorithm) operates, seeking Internal Liquidity before targeting External Liquidity.

The Dealing Range gives context to EVERY trade by defining:

• WHERE Premium and Discount zones are (50% divides the range)
• WHAT Liquidity exists inside (Internal) vs. outside (External)
• Whether price should be bought or sold at its current position
• The TARGETS for both bulls and bears

Why It Matters

• Without a Dealing Range, you cannot determine Premium/Discount accurately
• It tells you the SEQUENCE of Liquidity that will be taken (Internal → External)
• It identifies the BOUNDARIES that contain current price action
• When a Dealing Range is broken (External Liquidity taken), a NEW range forms
• Every professional ICT trade starts with identifying the current Dealing Range

How It Works

Identifying a Dealing Range:

1. Find the most recent significant Swing High (must have BSL above — stops resting)
2. Find the most recent significant Swing Low (must have SSL below — stops resting)
3. The range between = Your Dealing Range
4. Mark 50% (Equilibrium) — this is your Premium/Discount divider
5. Mark Internal Liquidity (minor swings within the range)
6. Mark External Liquidity (the Swing High and Low themselves)

Internal vs External Liquidity within a Dealing Range:

Dealing Range Lifecycle:

1. Formation — Swing High and Low establish the range
2. Internal Raid — Price sweeps minor Liquidity within the range
3. External Expansion — After internal is exhausted, price breaks to External Liquidity
4. New Range — Once External is taken, a NEW Dealing Range forms

Institutional Logic

How institutions use Dealing Ranges:

1. Define their operating zone — They know exactly where Premium and Discount are
2. Sequence their fills — They take Internal Liquidity first (less risk) before External
3. Set their targets — External Liquidity of the Dealing Range = Their major targets
4. Build new ranges — After taking External Liquidity, they establish new boundaries
5. Multi-timeframe alignment — Larger TF Dealing Ranges contain smaller TF ranges (fractal)

Why Internal before External:

• Internal Liquidity is safer to target (stays within the range)
• It provides additional fill opportunities without committing to a breakout
• Once internal is exhausted, the algorithm commits to an External raid
• This sequencing is PREDICTABLE — giving you an edge

Trading Application

Step 1: Mark the current Dealing Range

• HTF (Daily/4H): Identify the major Swing H/L
• Draw 50% Equilibrium
• Mark Internal Liquidity (minor highs/lows within)

Step 2: Determine if Internal or External Liquidity is being targeted

• If minor swing points WITHIN the range are being taken → Internal raid in progress
• If price is approaching the range boundaries → External expansion likely

Step 3: Trade based on position

• Price in Discount (below 50%) + Internal Lows being taken → Buy after sweep
• Price in Premium (above 50%) + Internal Highs being taken → Sell after sweep
• Price breaking range boundary → External Liquidity taken → Expect new range

Step 4: When Dealing Range breaks

• Old range no longer valid
• The breakout extreme + the previous range extreme = New Dealing Range
• Reassess Premium/Discount from the new range

Common Mistakes

• ❌ Not updating the Dealing Range after External Liquidity is taken — Once the high/low is swept and price continues, it's a new range
• ❌ Confusing Internal and External moves — Internal = within range; External = beyond range boundaries
• ❌ Using too many ranges — Focus on the MOST RELEVANT range for your trading timeframe
• ❌ Trading External Liquidity as a breakout — It could be a sweep that leads to reversal

Advanced Notes

• Nested Dealing Ranges: Monthly range > Weekly range > Daily range > 4H range. Best trades occur when multiple ranges agree
• Dealing Range + IPDA: The algorithm uses 20/40/60 day ranges as its macro Dealing Ranges
• Range expansion signals: When ALL Internal Liquidity is taken, prepare for External expansion
• Time within range: Most time is spent in Internal Liquidity raids. External moves are quick

Example

EUR/USD Dealing Range Trade:

1. 4H Range: High 1.0950 / Low 1.0820. Equilibrium: 1.0885
2. Internal Liquidity: Minor low at 1.0860, Minor high at 1.0920
3. Sequence: Price sweeps 1.0860 (Internal SSL) → Rallies to 1.0920 (Internal BSL)
4. After Internal cleared: Price breaks above 1.0950 → External BSL taken
5. New Range forms: New Low 1.0860, New High 1.0970
6. Entry: After 1.0860 Internal SSL sweep → Buy at 1.0865 → Target 1.0920 (Internal BSL)
7. R:R: 1:4.5

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