Introduction
The Outer Frame Of Intent
Before Smart Money refines the internal structure,
they first define the boundaries that contain it.
The External Range marks the high and low extremes,
this is the outer walls of liquidity.
It’s where control begins and ends,
where price delivers,
and where Smart Money reads bias with precision.
📍 The External Range defines context. Everything else lives within it.
What Is The External Range?
The Definition:
📊 The External Range is the distance between the most recent major swing high and swing low.
It represents the dominant structure,
the macro context that governs internal range behavior.
💬 In simple terms:
The External Range = the battlefield between buyers and sellers.
It’s where liquidity accumulates on both ends,
and where Smart Money determines premium and discount zones.
📍 Without the external range, internal structure has no meaning.
How Smart Money Defines The External Range
Smart Money defines the external range as:
- The most recent significant high (external swing high).
- The most recent significant low (external swing low).
They use these boundaries to:
1️⃣ Measure market bias: Bullish or bearish delivery.
2️⃣ Identify liquidity objectives: Where price is likely to seek.
3️⃣ Calculate premium vs. discount zones for execution.
4️⃣ Anchor internal range mapping for precision trading.
📍 External gives structure. Internal gives detail.
How Retail Traders Trade The External Range
1️⃣ Identify major swing high and low.
2️⃣ Mark the 50% equilibrium (fair value level).
3️⃣ Wait for liquidity to form near the external edges.
4️⃣ Observe internal structure developing inside.
5️⃣ Confirm displacement and direction before executing in alignment.
📍 The external range shows where control exists, not where emotion reacts.
Example
Reading The External Range
1️⃣ Price forms a major swing high and swing low.
2️⃣ The range between them becomes the “external boundary.”
3️⃣ Smart Money divides it into two halves, premium (above equilibrium) and discount (below equilibrium).
4️⃣ Internal structure unfolds inside, creating BOS, CHoCH, and rebalancing zones.
💬 Smart Money first defines the framework, then trades the flow within it.
The Do Nots
Common Mistakes Traders Make
❌ Trading internal setups before defining the external frame.
❌ Ignoring liquidity resting above or below the external range.
❌ Confusing minor swings for major external points.
❌ Failing to align execution with external bias.
💬 If you can’t define the boundaries, you can’t define your bias.
Final Thoughts
The External Range is the foundation of structure.
It defines context, bias, and liquidity objectives.
Retail trades inside chaos.
Smart Money defines the frame first,
then trades the story within it.
Because control isn’t found in reaction,
it’s built through structure.