ICT Concepts: Dealing Ranges (Multi-Timeframe Operation)🚨

Summary

In this lesson, the focus is on identifying and operating within multi-timeframe dealing ranges, with an emphasis on understanding how price reacts across various timeframes (1-hour, 4-hour, daily, weekly, monthly). The instructor explains how to apply a top-down approach to identify key reference points within each range and how to determine whether price will return to a discount or premium of those ranges. By using this method alongside Institutional Price Action (IPA) principles, traders can predict price movement more accurately, making the process of trading more strategic and effective.

Takeaways

• 😀 Multi-timeframe analysis is essential for understanding price movements across different time periods, from the 1-hour to monthly charts.
• 😀 The primary focus is identifying 'dealing ranges'—price levels where price is expected to either deliver to or avoid within each timeframe.
• 😀 A top-down approach is used to identify dealing ranges, starting with the weekly chart, then moving down to the daily, 4-hour, and 1-hour charts.
• 😀 Key reference points in a premium or discount range are crucial to understanding where price could be heading, such as fair value gaps, order blocks, and volume imbalances.
• 😀 Invalidation levels are set at the high or low of a dealing range. If these levels are broken, it's time to reassess the analysis.
• 😀 If the lower timeframe (e.g., 1-hour) supports price movement, it's an indicator that higher timeframe ranges may not be reached. If it doesn't support price, expect a return to a discount in a higher timeframe range.
• 😀 For bullish scenarios, when key reference points in a lower timeframe range support price, higher timeframe ranges are not likely to be visited again.
• 😀 In bearish conditions, the premium key reference points on a lower timeframe range (such as order blocks and fair value gaps) should reject price, otherwise, expect a return to higher timeframe ranges.
• 😀 When dealing with multi-timeframe analysis, signatures of price action (such as wicks and body closures) help confirm if the algorithm is respecting certain reference points in a range.
• 😀 Combining dealing ranges with IPA (Institutional Price Action) provides a framework for identifying expected price targets, which can be refined as new ranges and price action develop.

Q & A

What is the primary focus of the lesson in the provided script?

The lesson focuses on how to operate within multiple timeframes when dealing with ranges, specifically understanding how the algorithm cycles between higher and lower timeframes to complete objectives.

Which timeframes are primarily used for identifying dealing ranges in this lesson?

The primary timeframes used for identifying dealing ranges are the 1-hour (1H), 4-hour (4H), daily, weekly, and monthly timeframes.

What is the key concept behind multi-timeframe operation?

The key concept is that the algorithm continuously cycles between higher and lower timeframes, analyzing different dealing ranges to understand price movement and complete objectives.

How does the top-down approach help in identifying dealing ranges?

The top-down approach begins with the highest timeframe (weekly), then moves down to daily, 4-hour, and 1-hour timeframes. This allows traders to identify and understand the broader context of price action before zooming in on smaller details.

What is the significance of premium and discount areas within a dealing range?

Premium areas are typically resistance levels in a bullish market, while discount areas act as support in a bullish market and resistance in a bearish market. Identifying these areas is essential for predicting price movement within a range.

What role do invalidation levels play in the analysis of dealing ranges?

Invalidation levels are price points that, if breached, invalidate a trader’s analysis. In a bullish market, the dealing range low acts as the invalidation level, while in a bearish market, the dealing range high serves as the invalidation level.

What is the bottom-up approach, and how does it differ from the top-down approach?

The bottom-up approach starts with the lower timeframes (like the 1-hour chart) to determine whether the price is respecting the discount key reference points. It contrasts with the top-down approach, which begins with higher timeframes to set the broader market context.

What does it mean when the lower timeframe discount key reference points are 'supporting price'?

When the lower timeframe discount key reference points are supporting price, it suggests that the market is strong, and there is no need to return to the discount levels on higher timeframes. This indicates that the trend may continue in the direction of the bias.

Why is it important to monitor the market’s 'signatures' in different timeframes?

Monitoring market signatures (like wicks and bodies) helps identify whether price is respecting key reference points in the discount or premium areas. These signatures are essential for determining the strength or weakness of the market and predicting future price action.

How does the script integrate the concept of IPA (Institutional Price Action) with dealing ranges?

The script integrates IPA by using it to establish a bias and set targets for price levels (e.g., 20, 40, 60-day IPA lookback targets). Once the bias is set, dealing ranges are used to refine trade entries and to anticipate price movement within those levels.