Most ICT traders learn about premium and discount early. They understand the concept - buy low, sell high within the context of a range. What many traders skip is the step that makes the concept usable: defining the range itself.
Without a clearly defined dealing range, premium and discount are subjective. 'Price looks high' is not a trading framework. 'Price is above the 50% level of the dealing range established between the October swing high and the September swing low' is.
Before you identify the entry, identify the range. If you don't know where equilibrium is, you don't know if you're buying cheap or expensive.
The One Weekly Candle That Controls Every Trade You Take
What Defines a Dealing Range
A dealing range is defined by two points: a significant swing high and a significant swing low on the relevant timeframe. Significant means these are not minor internal swings - they are the major structural pivots that define the current phase of price delivery.
For a daily chart analysis, your dealing range might be the swing high from six weeks ago and the swing low from eight weeks ago. These are the outer extremes of the current range. The midpoint between them - the 50% Fibonacci level - is equilibrium.
Equilibrium is the most important level inside the dealing range. It divides the range into two equal halves. Above equilibrium, price is relatively expensive. Below equilibrium, price is relatively cheap. The ICT delivery model is built on this asymmetry.
Premium and Discount: The Practical Framework
In a bullish context - where the daily or weekly structure is making higher highs and higher lows - you are looking for buy entries. The dealing range tells you which buy entries are at a discount (favorable) and which are at a premium (unfavorable).
- →Discount zone (below 50% equilibrium): This is where ICT looks for buy entries in a bullish market. Price is below the midpoint of the range - relatively cheap relative to where the range is trading.
- →Equilibrium (the 50% level): A reaction point in both directions. Price often consolidates at equilibrium before committing to premium or discount. Not an entry zone - a monitoring zone.
- →Premium zone (above 50% equilibrium): This is where ICT looks for sell entries in a bearish market, and where ICT avoids buying in a bullish market. Price is relatively expensive. Buying at premium means buying near where institutions will be distributing.
The Core Rule
In a bullish context: only enter buys at discount. In a bearish context: only enter sells at premium. Any PD array - order block, FVG, breaker - in the wrong context of the dealing range is not a valid entry zone regardless of how strong the level looks.
How to Identify the Correct Dealing Range
The dealing range you use depends on the timeframe you are trading. This is the most common mistake: using the wrong range for the trade context.
| Trade Type | Range Timeframe | Swing Points to Use |
|---|---|---|
| Weekly swing trade | Weekly chart | Significant weekly swing high and low |
| Daily position trade | Daily chart | Most recent major daily swing pivots |
| Intraday session trade | 4H or Daily | Daily range or current 4H dealing range |
| London/NY entry | 1H or 15M | Session-based range or prior daily range |
| 5M scalp entry | Asian session range | Asian high and low as the micro dealing range |
The key is matching the range to the trade. A 5-minute entry using a weekly dealing range for premium/discount context will not give you the precision you need for an intraday entry. Use the smallest dealing range that still contains structural significance for the trade you are planning.
The Dealing Range Hierarchy
Dealing ranges exist on every timeframe simultaneously and they nest inside each other. The weekly dealing range is the largest context. The daily range sits inside it. The session range (Asian range for intraday) sits inside the daily. Each smaller range is interpreted within the context of the larger one.
The practical application: if the weekly range shows price at a discount, and the daily range shows price at a discount within that weekly discount, you have HTF confluence supporting a buy. When you then look for a PD array on the 1H or 15M at a discount, and wait for CISD to confirm - every layer of the hierarchy is aligned.
Contrast that with a trader who finds an order block on the 15M without checking whether it sits in premium or discount on the daily and weekly. The level may be technically valid. The context may be completely wrong. The result is entering against institutional positioning.
The Most Common Dealing Range Mistake
Using a range that is too small - trading an internal dealing range when the structure of the higher timeframe is unclear. An internal range is a minor swing within the larger range. It has its own premium and discount, but entering at the discount of an internal range that is itself inside the premium of the macro range means you are buying expensive at the small scale.
Always zoom out before you zoom in. Confirm the macro range and where price sits within it before identifying entries on the smaller range. The entry will only make sense if the macro context supports it.
Combining the Dealing Range With CISD
The dealing range tells you where to watch. CISD tells you when to act. Once you have identified that price is at a discount in the correct HTF context, and you have found a high-probability PD array in that discount zone, the entry trigger is still CISD. Do not enter just because price arrived at a discount PD array. Wait for the displacement candle confirming that institutions have engaged and delivery has shifted.
The dealing range removes the wrong entries by filtering context. CISD removes the early entries by requiring a confirmation signal. Together they define the complete entry criteria for a high-probability ICT trade.
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Start Free 7-Day TrialFrequently Asked Questions
What is the ICT dealing range?
The ICT dealing range is the price range between a significant swing high and swing low that price is currently trading within. The midpoint of this range is equilibrium. Above equilibrium is premium. Below equilibrium is discount.
How do you find the dealing range in ICT?
Identify the most recent significant swing high and swing low on the timeframe relevant to your trade. These are your range extremes. The midpoint between them is the 50% equilibrium level - the line that separates premium from discount.
What is equilibrium in ICT dealing range?
Equilibrium is the 50% level of the dealing range - the midpoint between the range high and range low. Price at or above equilibrium is at a premium relative to the range. Price below equilibrium is at a discount. Buying at discount and selling at premium is the core of the ICT delivery model.
How does the dealing range relate to premium and discount?
The dealing range defines the full context for premium and discount. Without a clearly defined range, you cannot objectively determine whether price is cheap or expensive. The range gives you the reference frame. Premium and discount are meaningless without it.
What timeframe should I use for the dealing range?
Match the range to your trade. Daily swing range for daily trades, weekly range for weekly trades, and the Asian session range for intraday entries. The HTF range sets the overall context; the LTF range defines entry precision within the HTF context.