Summary of "2022 ICT Mentorship Topical Study - Dealing Ranges"
Main ideas, concepts, and lessons
1) What an ICT “dealing range” is (core definition)
A dealing range is created when price:
- Takes out a side (either buy-side or sell-side liquidity),
- Reverses, and
- Takes out the opposite side.
How it’s drawn in the lecture
- The dealing range high-to-low is the interval from the first liquidity taken to the opposite liquidity taken (i.e., “from here to here” in the speaker’s examples).
ICT dealing-range purpose
- It frames where liquidity was engineered/collected, and therefore where price is likely to revert afterward (often toward the next liquidity pool).
2) Market-structure intent: trade with higher-timeframe bias, not against it
The speaker argues against treating a liquidity sweep as a full market structure shift if doing so would mean trading against the primary trend.
Instead, the emphasis is:
- Submit to the higher-timeframe bias and momentum direction.
- Interpret sell-side taken under a bullish higher-timeframe context as accumulation (smart money buying those sell stops), not as a signal to “pick tops.”
3) “Smart money” explanation using liquidity targets
In the lecture’s model:
-
If price runs below a swing low / takes sell-side:
- Stops trigger (a flood of sell orders).
- Smart money buys those sell stops, and price can then travel higher to buy-side liquidity.
-
Later, if price pushes above a short-term high:
- Traders’ protective stops trigger (buy-side liquidity).
- Smart money may then sell to that buy-side pool.
Key idea: “buy-side” and “sell-side” are repeatedly portrayed as the fuel for directional moves.
4) Using the USD as a “barometer,” not as a direct trade
The speaker says he doesn’t trade the dollar directly, but uses the Dollar Index as analytical reference.
- Teeter-totter logic:
- If the dollar is expected to go higher, foreign currency pairs should generally go lower, and vice versa.
Goal: not predicting every tick, but identifying when liquidity is likely to get collected.
5) High-probability trading = “one-sidedness” in price
A high probability setup is where the market becomes one-sided—it appears more likely to move up or down.
In their framework:
- If price is bullish-likely, the next opportunity to short should be minimal or hard to justify.
Patience requirement:
- One-sidedness may not appear for a day, a week, or longer—traders wait for it.
6) Forex frustration: lack of high-probability conditions (as argued by the speaker)
The speaker claims some forex pairs (example: EUR) currently offer no high-probability setup:
- They may run either way, including into fair value gaps, without consistent follow-through.
As a result, he avoids trading these uncertain conditions rather than gambling.
7) Correlated SMT divergence as a hypothetical decision tool (example: cable vs EUR)
The lecture introduces correlated SMT divergence:
- Two correlated pairs (e.g., GBP/USD and EUR/USD) don’t behave the same way.
Hypothetical reasoning pattern
- If one pair makes a lower low while the other does not, that relative failure suggests divergence.
Example logic stated:
- If bearish on USD and bullish foreign currency, divergence between GBP and EUR could indicate EUR as the stronger/rally candidate (because EUR failed to make the lower low compared to cable in the comparison described).
Important clarification
- This is hypothetical discussion, not an automatic trade guarantee.
8) Liquidity runs vs breakout trading
For instruments like AUD/USD, the speaker contrasts:
- Breakout mentality: “spike down to sweep that level”
- His preference: look for price to run into liquidity levels (old lows/highs) as the actual trigger/condition.
He explicitly states:
- He is not a breakout trader.
- He focuses on liquidity targeting (runs into old highs/lows).
9) When the environment is too uncertain, he chooses what is tradable
The speaker claims forex has become less reliable due to:
- reduced liquidity, and
- broader macro effects (e.g., supply chain, exchange conditions).
At the moment, he feels more comfortable trading:
- stock index futures
- crude oil because he believes high-probability conditions can be found more consistently.
10) Discipline, mindset, and journaling (behavioral instruction)
Mindset guidance in the lecture includes:
- Avoid negative self-talk in journaling/social posts (e.g., “this should have been easier,” “I’m struggling”).
- Use positive self-talk by recording:
- what you anticipated correctly,
- the logic behind the setup, and
- the “silver lining” even in losses.
The aim is to keep the trader’s subconscious focused on learning rather than discouragement.
11) “War” framing: trading is not entertainment; it’s risk management
Markets are framed as adversarial:
- Know when to “pick shots,” when to flank, and when to retreat.
Retreat means:
- don’t engage when conditions aren’t favorable,
- let stops define wrongness,
- avoid trades when risk can’t be defined.
12) Equity-index futures example: dealing-range logic and a daily-to-weekly “draw” plan
The lecture shifts into a walkthrough using:
- a daily-chart dealing range, and
- a fair value gap (FVG) that can remain open.
Repeated structure
- Identify a dealing range (high/low) and liquidity pools.
- Determine bias (bearish in the walkthrough).
- Expect price to revert toward equilibrium, then attack the next liquidity.
Why setups form (as described)
- weekly profile expectations (a template for how price “delivers”),
- gaps behaving like breakaway gaps (not fully filling until lower objectives are hit),
- timing constraints (e.g., “only had Friday to fulfill a run”).
Methodology / instruction list presented (as a step-by-step process)
A) Build an ICT “dealing range” map
- Identify two swings where:
- the first liquidity sweep happens (take buy-side or sell-side),
- price reverses,
- then price sweeps the opposite liquidity.
- Draw the range:
- Dealing range = from the first taken side to the opposite taken side.
B) Interpret the range using bias and “liquidity engineering”
- Determine higher-timeframe bias:
- If higher timeframe is bullish:
- treat sell-side sweeps as potential buying opportunities (smart money accumulating sell stops),
- avoid calling the move a top unless bias/support logic changes.
- If higher timeframe is bullish:
- Determine which side is likely targeted next:
- after one pool is taken and absorbed, expect travel toward the other pool.
C) Enforce “high probability = one-sidedness” selection
- Wait until price action becomes clearly more likely in one direction.
- Test the trade validity:
- If you can’t justify the opposing direction (short when bullish-likely, long when bearish-likely), that qualifies as “high probability” under this definition.
- If the market is balanced/choppy, don’t trade.
D) Avoid “gambling” trades when risk can’t be defined well
Don’t enter trades when:
- the setup lacks one-sidedness, or
- you can’t define where risk ends and wrongness begins.
Retreat/sit out is treated as correct behavior.
E) Use fair value gaps as targets, especially “breakaway gaps”
When an FVG is left open and characterized as a breakaway gap:
- expect price to move until it hits lower-level objectives (the gap may remain unfilled for some time).
Directional bias determines interpretation:
- Bearish bias: use the gap/structure to anticipate downside liquidity targeting.
- Bullish bias: reverse the directional logic.
F) Use “equilibrium/premium-discount” to time/structure entries
- Define equilibrium (a reference point) inside/around the dealing range.
- Prefer entries in the relevant zone:
- short in premium (when bearish),
- long in discount (when bullish), as part of the liquidity-driven path.
G) Planning a weekly “draw” with time constraint awareness (example logic)
- Identify a daily gap/imbalance likely to be delivered soon (e.g., near week-end).
- Check if price action suggests it’s gravitating toward that gap.
- Execute with intraday timeframes:
- wait for retracement into a value area,
- then target the draw (e.g., a “low-hanging fruit” round-number objective).
Speakers / sources featured
- Speaker: The main instructor/lecturer (referred to as ICT throughout; no separate guest speakers are clearly identified).
Category
Educational
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