Markets move up and down, but price is never “cheap” or “expensive” by itself.
It’s only cheap or expensive relative to a range.
That’s where premium and discount come in.
🔹 Step 1: Define the Range (Most Important Part) use the Fib retracement to do this with settings 0 ,0.5 ,1 enabled 0 and one on the range 0.5 is the 50 % level
🟥And allways consider the market structure shorting in a bullish trend or longing in a down trend comes with a higher invalidation risk🟥
Before talking about premium or discount, you must define a high and a low.
This range can be:
A recent swing high → swing low
A daily / weekly range
A clear impulse move
Once you have a high and low, you now have context.
🔹 Step 2: Split the Range (50% Rule)
Take the midpoint (50%) of the range.
Above 50% = Premium
Below 50% = Discount
That’s it.
📌 Price above the midpoint is considered expensive
📌 Price below the midpoint is considered cheap
🔺 Premium Zone
Premium means price is high relative to the range.
What you do in premium:
Look for shorts
Take profits on longs
Expect distribution
What you avoid in premium:
Blind buying
Chasing breakouts without confirmation
Premium is where smart money sells, not buys.
🔻 Discount Zone
Discount means price is low relative to the range.
What you do in discount:
Look for longs
Accumulate
Expect re-accumulation
What you avoid in discount:
Panic selling
Late shorts
Discount is where smart money buys, not sells.
🧠 Important Truth
Price can stay in premium or discount for a long time.
So:
Premium ≠ instant sell
Discount ≠ instant buy
You still need confirmation.
🔹 PD Arrays (Price Delivery Arrays)
PD Arrays are areas where price reacts repeatedly.
They help you refine entries inside premium or discount.
Think of PD arrays as tools, not signals.
🔸 Common PD Arrays (Simple List)
1. Fair Value Gap (FVG)
Imbalance in price
Often acts like a magnet
Best used in discount for longs, premium for shorts
2. Order Blocks (OB)
3. Liquidity Pools
Equal highs / equal lows
Resting stops
Price loves to sweep them
4. Previous Highs / Lows
Daily high / low
Weekly high / low
Old support / resistance
5. VWAP / Session Opens (advanced)
Used for intraday bias
Institutions track these levels
🔑 How Premium + PD Arrays Work Together
This is the key idea:
Premium and discount give direction.
PD arrays give precision.
Example (Short Setup):
Price is in premium
Price sweeps buy-side liquidity
Price enters a bearish FVG or OB
You wait for LTF confirmation (CHOCH, BOS)
Enter short with structure
Example (Long Setup):
Price is in discount
Sell-side liquidity gets swept
Price taps bullish FVG or OB
LTF shift confirms
Enter long
🚫 Common Beginner Mistakes
Using PD arrays without premium/discount context
Ignoring higher-timeframe range
Context first. Always.
🟥 Key Takeaway 🟥
Premium = look to sell
Discount = look to buy
PD arrays = entry refinement
Confirmation = execution
