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UNDERSTAND PREMIUM AND DISCOUNT

Israel Godwin

In ICT-style analysis, traders often divide a defined dealing range into premium and discount using its midpoint.

Price in the upper half is described as premium, while price in the lower half is described as discount.

This framework can help traders assess location, but premium does not automatically mean sell and discount does not automatically mean buy.

First establish a meaningful range, then consider direction, liquidity, and confirmation.

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