An Easy Guide On ICT Dealing Ranges

Summary

In this video, the trader dives into the challenge of picking the right dealing range, a common struggle among traders. They break down the process into key steps, starting with identifying higher time frame order flow and determining the correct range. The trader emphasizes using the 4-hour chart to confirm market direction and discusses the importance of framing the right bias with key levels and ranges. The video also introduces a personal trick, the Double Dealing Range (D2R) technique, which helps gauge order flow on lower time frames for more accurate entries. It’s an informative guide for traders seeking to refine their range selection and trading strategies.

Takeaways

• 😀 Understanding the importance of picking the right dealing range to avoid stop losses getting hit and price moving in your favor.
• 😀 Higher time frames (e.g., daily chart) are essential for understanding broader market trends and identifying key levels like rejection blocks.
• 😀 Smaller ranges within larger ranges are crucial for precision in order pairing, targeting buy and sell stops more effectively.
• 😀 Use the 4-hour chart as your baseline for determining order flow, avoiding reliance on the 1-hour chart for market structure changes.
• 😀 The 'Double Dealing Range (D2R) Technique' involves identifying two key ranges—one for low-risk entry and the second to confirm order flow direction.
• 😀 Recognize the importance of market cycles—expansion, reversal, consolidation, retracement, and expansion—when identifying price action patterns.
• 😀 Key levels on the daily chart, like rejection blocks, form the foundation for assessing whether a trend is likely to continue or reverse.
• 😀 The D2R technique helps refine entries by allowing traders to wait for a price pullback, ensuring a more favorable entry within the overall trend.
• 😀 Focus on lower time frames (e.g., 1-hour and 15-minute charts) for precise entry points once you've determined market bias from higher time frames.
• 😀 Risk management is crucial: use wider stop losses when trading on higher time frames and aim for reasonable profit targets that align with your order flow strategy.

Q & A

What is the main problem traders face when picking the right dealing range?

Traders often struggle with choosing the correct dealing range, which can result in stop losses getting hit. This happens when the price moves in their desired direction after their stop loss has been triggered due to poor range selection.

How can traders mechanically pick the right dealing range?

Traders can mechanically pick the right dealing range by using higher time frame order flow, identifying key levels such as rejection blocks, and then using smaller ranges within these larger ranges to find entry points for trades.

Why is higher time frame analysis important when picking a dealing range?

Higher time frame analysis provides the overall market context and bias, which is crucial for making informed decisions. It helps identify significant levels and trends that influence the smaller time frame analysis for entry points.

What is the purpose of order pairing in dealing range selection?

Order pairing involves using a higher time frame range to find buy and sell stops and pairing these with smaller ranges to pinpoint high-probability entry points. It is crucial for aligning trades with market flows and ensuring proper risk management.

What role do rejection blocks play in determining the right dealing range?

Rejection blocks represent key levels of support or resistance. Identifying these levels on a higher time frame chart helps traders determine the potential direction of price movement and allows them to define their dealing ranges accurately.

What is the Double Dealing Range (D2R) technique?

The Double Dealing Range (D2R) technique is a method where traders wait for two ranges to form: the first range identifies a low-risk setup, and the second range provides the actual entry point. This technique is effective for refining trade entries based on market cycles.

Why should traders avoid focusing on lower time frames like the 1-hour for bias confirmation?

Traders should avoid using the 1-hour chart for bias confirmation because it can be less reliable. The 4-hour time frame is recommended for determining the market bias, as it provides a clearer picture of the market's structure and order flow.

How can smaller ranges within larger ranges help traders in making precise trades?

Smaller ranges within larger ranges allow traders to focus on more refined entry points. By identifying these smaller ranges, traders can more accurately align their trades with the larger market structure, improving their chances of success.

What are fair value gaps and how do they relate to the double dealing range technique?

Fair value gaps are areas in the chart where there is a significant displacement in price, indicating strong market momentum. These gaps help confirm the validity of a range and can serve as points of interest (POIs) for entry, especially when using the Double Dealing Range technique.

How can time frame alignment enhance trading strategies?

Time frame alignment ensures that the trader is using the appropriate time frame for each stage of analysis. By aligning higher time frame analysis with lower time frame setups, traders can make more informed decisions and increase the likelihood of successful trades.