Ever feel like the market has a mind of its own before you even grab your first coffee? If you've been hanging around trading circles lately, especially the ones obsessed with "smart money" and Inner Circle Trader (ICT) concepts, you've probably heard the term CBDR.
Honestly, it sounds like some boring regulatory filing or a climate change treaty. In some circles, it is. But for people staring at 15-minute charts at 3:00 AM, the Central Bank Dealers Range (CBDR) is basically the cheat code for figuring out where the high and low of the day are going to land.
What is CBDR in session open anyway?
Let’s keep it simple. The CBDR represents a very specific slice of time—usually between 2:00 PM and 8:00 PM New York time. This is the "dead zone" after the New York session winds down but before the Asian session really starts kicking.
Why does this matter? Because during these six hours, the big banks and "dealers" are essentially balancing their books. They aren't trying to start a massive trend; they are providing liquidity and keeping things steady.
When the market finally "opens" in the next cycle, the price usually explodes out of this range. If you know how to measure that box, you can project where the price is headed with almost eerie accuracy. It's like finding a spring that's being compressed; you just have to figure out which way it’s going to pop.
The math behind the madness
You don't need a PhD, but you do need to be precise. To find the CBDR, you look for the highest high and the lowest low between that 14:00 and 20:00 (NY time) window.
Most pros prefer using the bodies of the candles rather than the wicks. Why? Because the wicks are often just noise or "fakeouts" from the algorithms. The bodies show where the actual volume is being held.
- Ideal Range: You’re looking for a tight range. Somewhere between 20 to 30 pips (or points, depending on what you're trading) is the sweet spot.
- Too Big? If the CBDR is over 40 pips, the data is kinda messy. On those days, the market usually just chops around, and the "projections" won't work as well.
- Standard Deviations: This is where the magic happens. You take the height of that 2:00 PM–8:00 PM box and stack it. One box up, two boxes up, three boxes up.
How the "Daily Low" actually forms
Think about a typical "buy" day. The market doesn't just go up from the start. It usually drops first to "hunt" for liquidity—tripping all the stop losses of the early buyers.
This is what traders call the Judas Swing.
If you've identified your CBDR, you'll often see that this initial drop goes exactly 1 or 2 "standard deviations" (box heights) below your CBDR. That's your signal. When the price hits that level and starts to reject it, you’re likely looking at the low of the day. From there, the market often reverses and flies toward the 4th standard deviation on the opposite side.
It’s almost like the banks are using these mathematical increments to decide when they've bought enough. It sounds like a conspiracy theory until you see it happen three days in a row on the EUR/USD or the NASDAQ.
Why most people get CBDR wrong
The biggest mistake? Mixing it up with the "Asian Range."
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They are close, but they aren't the same thing. The Asian Range usually starts at 8:00 PM NY time (right when the CBDR ends) and goes until midnight. If you use the wrong box, your projections will be off, and you'll be "buying the dip" right before the market craters another 20 points.
Also, don't ignore the Flout. The Flout is another ICT term that combines the CBDR and the Asian Range together (from 2:00 PM to midnight). Sometimes, if the CBDR is too small to be meaningful, the Flout gives a better "true" range for the day's expansion.
Is it just for Forex?
Actually, no. While Michael J. Huddleston (the guy behind ICT) originally focused on currencies, traders are using this for everything now.
If you trade the S&P 500 (ES) or NASDAQ (NQ) futures, the CBDR is still incredibly relevant. Even though the "stock market" isn't open during those hours in the traditional sense, the globex futures are trading. The dealers are still dealing. The algorithms are still running the same math.
Practical steps to start using CBDR tonight
Don't just take my word for it. Go look at your charts.
- Set your chart to New York Time (UTC-5 or UTC-4 depending on Daylight Savings).
- Draw a box around the price action from 14:00 to 20:00.
- Measure the height of that box.
- Watch what happens between midnight and 3:00 AM NY time.
If the price drifts outside the box and hits a level exactly 1.5 or 2.0 times the height of the box and then forms a "Market Structure Shift" (a quick reversal pattern), you’ve probably found the session's direction.
Honestly, the hardest part isn't the math; it's the patience. Most traders see the market move 5 pips and think they're missing the "big move." But the CBDR reminds you that the market usually has a specific "quota" of distance it needs to travel before it's ready to trend.
Stop guessing where the support is. Start measuring where the dealers are actually setting their boundaries. You might find that the "random" chaos of the market open isn't actually that random at all.