Here we have the Central Banks Dealers Range.
The central banks are institutions in charge of price.
The central banks' price range occurs from 2pm-8pm
Within that specific time, you find the lowest low and highest high. (I use the bodies and not the wicks)
If the range is less than 40 pips it will give you a better understanding of where the banks will most likely price the London high or London low.
This range needs to be used in conjunction with DAILY BIAS.
Using Standard deviations up to 4 (above and below) will give you a range to work with.
In this example, the pip range of the CBDR was 10 so 2 S.D is 20 pips. Likewise, 3 S.D would be 30 pips.
Typically most sell days will create a high of the day from the dealers' range up to three standard deviations. Typically it’s 1 or 2 Standard deviations.
Vice versa can be said when bullish . Low created 3 Standard deviations below the Central bank dealers range. Typically it’s 1or 2 Standard deviations.
High impact news will cause larger standard deviations to be reached.
As you can see the high of the day formed above M.O.P and in the London Kill zone.
The CBDR is helpful with finding the LOD or HOD selection.
Using the CBDR is more accurate Tuesday - Thursday. That is were we see most of the volume of the week. This does not mean it could not occur on Monday
The central banks are institutions in charge of price.
The central banks' price range occurs from 2pm-8pm
Within that specific time, you find the lowest low and highest high. (I use the bodies and not the wicks)
If the range is less than 40 pips it will give you a better understanding of where the banks will most likely price the London high or London low.
This range needs to be used in conjunction with DAILY BIAS.
Using Standard deviations up to 4 (above and below) will give you a range to work with.
In this example, the pip range of the CBDR was 10 so 2 S.D is 20 pips. Likewise, 3 S.D would be 30 pips.
Typically most sell days will create a high of the day from the dealers' range up to three standard deviations. Typically it’s 1 or 2 Standard deviations.
Vice versa can be said when bullish . Low created 3 Standard deviations below the Central bank dealers range. Typically it’s 1or 2 Standard deviations.
High impact news will cause larger standard deviations to be reached.
As you can see the high of the day formed above M.O.P and in the London Kill zone.
The CBDR is helpful with finding the LOD or HOD selection.
Using the CBDR is more accurate Tuesday - Thursday. That is were we see most of the volume of the week. This does not mean it could not occur on Monday
