ICT Dealing Ranges: How to Choose and Use the Right Range

Premium and discount only make sense once you know which range you are measuring. Draw the wrong range and the same price can look cheap or expensive depending on your mood. ICT traders call the range they work from a dealing range, and choosing it well is a skill in its own right.

This lesson builds on Premium and Discount and focuses on selecting the range, nesting ranges across timeframes and knowing when a range is finished.

What it is

A dealing range is the span between a swing high and a swing low that frames current price. Its key parts are:

• Range high and range low: the two anchors.
• Equilibrium: the midpoint, (range high + range low) ÷ 2.
• Premium: the upper half, where ICT traders prefer to look for sells.
• Discount: the lower half, where they prefer to look for buys.

Choosing the anchors

The practical question is which swings to use. A common ICT approach is to anchor on the most recent swing high and swing low that took liquidity. In a bullish leg, that is usually the low that swept sell stops beneath an earlier low, followed by the high that ran buy stops above an earlier high. These swings matter because the current leg was launched from them. A random minor swing inside a choppy area tells you much less.

Educators differ on details, such as whether to use wicks or bodies and how significant a swing must be. Pick one method and apply it every time.

Nested ranges

Ranges sit inside ranges. A daily range might contain a 4-hour range for the current leg, which contains a 15-minute range for the latest pullback. A typical workflow is:

Ideally, a buy sits in discount on both the bias range and the setup range. See top-down multi-timeframe analysis for how to move between layers.

When a range is complete

A bullish range is usually treated as complete when:

• Price reaches or trades beyond the range high. The target has been met, and a new range is drawn from the low that launched the break.
• Price closes below the range low. The anchor has failed, and the bullish range is no longer valid.

The reverse applies to a bearish range. Until one of these happens, the range stays in use.

How to identify it

1. Start on your bias timeframe. Identify the current leg.
2. Find the liquidity events. Which low swept an older low? Which high ran an older high?
3. Anchor the range on those swings.
4. Mark equilibrium, and optionally the 25% and 75% levels.
5. Check the range is current. If price has already traded beyond either anchor, redraw.
6. Drop a timeframe and draw the range of the latest retracement inside the bigger one.
7. Look for a PD array in the preferred half of both ranges.
8. Note the completion and invalidation levels before planning any trade.

Worked example: nested ranges on XAU/USD

Prices are illustrative, quoted in dollars per ounce.

Bias range (4-hour). Gold drops to $2,340, taking out an earlier low at $2,345, then rallies to $2,420, running an earlier high at $2,412. The dealing range is $2,340 to $2,420, an $80 span.

Equilibrium = ($2,340 + $2,420) ÷ 2 = $2,380. The 25% level is $2,340 + 0.25 × $80 = $2,360, and the 75% level is $2,340 + 0.75 × $80 = $2,400.

Setup range (15-minute). Price pulls back from $2,420 and dips to $2,372, sweeping intraday equal lows at $2,375. It then rallies to $2,394 with a market structure shift. The setup range is $2,372 to $2,394, with equilibrium at ($2,372 + $2,394) ÷ 2 = $2,383.

Entry. A trader places a buy limit at $2,378, inside a small bullish fair value gap. That price is below $2,383 (discount on the 15-minute range) and below $2,380 (discount on the 4-hour range).

• Stop: $2,369, $3 below the sweep low. Risk = $2,378 − $2,369 = $9.
• First target: $2,394, the setup range high, $16 away (about 1:1.8).
• Final target: $2,420, the bias range high, $42 away (about 1:4.7).

With a $10,000 account risking 1% ($100), and a contract where one lot is 100 ounces ($100 per $1 move), one lot would risk $900. Size = $100 ÷ $900 ≈ 0.11 lots, risking about $99. Contract sizes vary by broker, so check yours with the Position Size Calculator.

Completion. If gold trades above $2,420, the 4-hour range is complete and a new one is drawn from $2,372 (the low that launched the break). If it closes below $2,340, the bullish range is invalid.

How traders use it

• Location filter. Buys only in discount, sells only in premium, measured on a named range.
• Targets. The opposite end of the range, and the external range liquidity beyond it, are natural targets.
• Finer entries. Some traders narrow the discount zone further with the optimal trade entry levels.
• Bias checks. A range that keeps completing at the high and redrawing higher supports a bullish view.

The range describes location. It does not create a trade on its own, and price can move from discount to below the range low. Size every trade so the loss is affordable.

Common mistakes

• Anchoring on minor swings. Tiny ranges flip between premium and discount constantly.
• Using an outdated range. Once an anchor is broken, the old equilibrium no longer applies.
• Mixing layers. Calling price "in discount" without saying which range you mean.
• Treating equilibrium as a level that must hold. It is a reference line, not support.
• Ignoring the higher range. A 5-minute discount entry can still sit in deep premium on the 4-hour chart.

Summary

A dealing range is the swing high to swing low that frames current price, best anchored on the swings that took liquidity and launched the leg. Equilibrium splits it into premium and discount, and ranges nest from bias timeframe to entry timeframe. A range is complete when price reaches its opposite extreme or breaks its anchor, and then it is redrawn. Use ranges for location and targets, combine them with a PD array and a trigger, and plan the stop and size before entering.