DR/IDR Method
This document helps illustrate the method of algorithmic footprint setups around the Defining
Range (DR) and Implied Defining Range (IDR) concepts.
To define DR/IDR we measure the first hour of a given session. For example, the NY
equities session RDR/RIDR ranges we use the 09:30 AM equities open until 10:30 AM (NY
Time).
The method supports existing ICT entry models currently being used.
Ideally, this method works with the highest probability on non-high-impact news days.
These news days lowers the win rate.
1
Overview
To define the NY equities session RDR/RIDR ranges we use the 09:30 NYAM equities open
until 10:30 NYAM. The low and high wicks of this range is the DR. To find the IDR we use
the m5 candle body close to measure the range.
If price (m5 TF) closes above DR level, there is 88% probability that price will not close
below DR Low. Same for closing below DR, creating DR high as HOD.
2
ADR/AIDR - ODR/OIDR - RDR/RIDR Sessions
There are additional Ranges outside of the Regular DR/IDR (RDR/RIDR) that include After
(ADR/AIDR) and Overnight (ODR/OIDR) ranges.
The times for these Ranges are based on NY equities market time zone and include:
ADR/AIDR - 19:30 - 20:30 — Valid until 02:00
ODR/OIDR - 03:00 - 04:00 — Valid until 08:30
RDR/RIDR - 09:30 - 10:30 — Valid until 16:00
3
Each session DR develops a relationship with subsequent session DRs. The various levels
within each session DR range remain active through time, so ‘look left’ must be part of your
setup model.
Studying the relationship and behavior between the ranges will provide additional
high-probability opportunities outside (as well as within) the NY equities trading session.
These levels can be used in the session coming into NY.
Levels are valid within the NY / RDR RIDR session as well.
4
ADR and ODR sessions contain relevant levels to indicate potential high-probability setups.
5
Models
While each session has it’s own unique range and entry model, cross sessions can also
have an effect on each other.
Understanding relationships between sessions helps to provide a ‘bigger picture’ of where
price might want to go.
6
7
Upside Expansion Model
We need to see 0.5 hold.
Each subsequent DR/IDR session creates new higher highs and higher lows compared to
previous session levels.
Within each session, the session lows are respected and not expected to be violated.
8
Range Expansion Model
Each new session DR/IDR range extends the previous DR/IDR range.
Generally, the mean level of each subsequent DR/IDR stays within it’s previous session
DR/IDR range.
If the mean forms below it’s previous DR/IDR range we can expect a trend lower. And, vice
versa for upside.
Overall, we can expect price to close near mean of the entire range.
9
Downside Expansion Model
This is exactly the same as the Upside Expansion Model, but obviously to the down side.
10
Contraction Model
With the current formation of DRIDR range that forms with the previous range, we identify
the Contraction Model.
This setup requires special consideration to otherwise straight-forward DRIDR setups as the
context of the model leans towards expansion to both sides.
11
Advanced Tips
Tip #1
Compare the open and close of the DR. If the difference is a large margin, bias should lean
towards the direction of the close. Even if we don’t get a m5 candle close above/below
DRIDR.
For example, the long bias is indicated by a 20pt difference between the open and close of
the DR. This is sufficient (no close above) to lean on for long bias.
Even though we did not get a close above IDR or DR, we have long bias based on the
direction and range of the DR.
Tip #2
Pulling Fib retracement from IDR low to IDR high with 0.5 incremental standard deviation
(STD) values creates the target matrix.
STD within the target matrix will provide high-probability entry and exit levels in both
directions.
12
Tip #3
After 10:30 the IDR high/low levels become very sensitive to price reaction.
With long bias, we can enter long position at the IDR low for the session.
Either side of the DRIDR range are considered sensitive and should be viewed as potential
entry/exit levels.
13
Tip #4
If price is extending above the DR high it is expected to react the 0.5 STD level with
high-probability.
STD levels can be coupled with ICT PDAs that create logical entry/exit levels above and
beyond the DRIDR high/low levels. So targets beyond the 0.5 level are valid.
14
Tip #5
If for example BSL is taken, there is a potential counter-trend short setup using ICT model
for entry. This setup should be considered internal range and managed accordingly.
Knowing the IDR high level is sensitive, we can use it as a exit target. Paired with IR SSL,
OTE and FVG, we have an ideal target level.
15
Tip #6
Using the same level for new long position is valid. Our bias is still long. Therefore, as in
above example, we have IDR high, OTE, FVG entry for long.
Tip #7
The overnight session has an 88% chance of NOT closing below the RDR/RIDR low.
This creates opportunities for additional long setups.
16
Setups
Downward Expansion
ODR/OIDR Low entry
RDR/RIDR entry:
17
TICK Divergence
RDR/RIDR entry:
Retirement Setup
18
Statistical probabilities for DR/IDR sessions
19
Open Questions
What is Expansion Model?
What is Retirement setup?
Retirement setup is basically when we have a confirmation and then retrace (about 80
percent or more) to the opposite side of the IDR.
With the probability of the DR being true about 88% of the time, we have a very good Risk to
Reward Setup in this scenario, hence the name “Retirement Setup”.
20
Notes
● Three body closes inside VIB indicates high response from the level, and potential
rejection.
● Generally, the first half hour after DR close creates a quick confirmation that price
intends to move in the given direction.
● Previous day's RDR std deviations are considered for current day Then current day
respective session std deviations
○ So lets say its Tuesday RDR session, you’ll have 2 fibs:
1. Monday RDR deviations
2. Tuesday RDR deviations.
● If it was Wednesday ODRthen you’ll have:
1. Tuesday RDR deviations.
2. Wednesday ODR deviations.
Key takeaway. Don’t trade on sessions that have high impact news.
21
22
Rules
● Look to see confirmation direction based on DR/IDR candle close
● IDR candle close, early indication
● DR candle close, confirmation - Only look for trades in that direction!
● Look at high, mid and low levels.
● Look for FVG and OB inline with DR levels.
● Also take into account DR open and close price.
● Look at previous DR levels for reaction points.
● Look for DR models, contraction, expansion, range.
● TP for trades is next DR level high or low, or next swing high or low
● Risk no more than 2R per DR session.
23