Dealing range in gold trading
A dealing range is the swing from a significant low to a significant high (or the reverse) that ICT traders use to define premium, discount and targets.
Also called Trading range (ICT), Swing range
A dealing range is the span between the most recent significant swing low and swing high on the timeframe being analyzed. It is the reference frame for premium and discount: the 50% level splits it, and entries are sought in the half that matches the bias. The range’s extremes are also liquidity: the high holds buy stops and the low holds sell stops, so they double as targets or as levels to be swept.
How it applies to gold trading
On gold the dealing range is usually set from the 4-hour or daily chart and used to frame intraday trades. If the daily range runs from 3,900 to 4,100, equilibrium is 4,000, and a trader with a bullish bias looks for longs below it, ideally in the OTE zone at 3,943 to 3,976. Intraday, a smaller dealing range from the London session low to its high frames the New York session in the same way. When price breaks out of the range and displaces, a new range is defined from the new swing.
Dealing ranges also tell a trader where the market is likely headed: from a discount, toward the range high where liquidity rests; from a premium, toward the range low.
A common mistake
Choosing a range that is too small for the trade. A 5-minute range gives a 5-minute premium and discount, which is meaningless for a trade meant to last the session.
See also: Premium and discount, OTE, Liquidity, Consolidation and range.
Frequently asked questions
How do I pick the dealing range on gold?
Use the most recent swing low and swing high that are clear on the timeframe above the one you trade. If the swing is ambiguous, move up a timeframe until it is not.
When does the dealing range change?
When price breaks beyond one of its extremes with displacement and forms a new swing. The new range runs from the old extreme that held to the new one.