Premium and Discount Zones

1. What Are Premium and Discount Zones?

In trading, we divide a price range into two parts:

Premium Zone: The upper 50% of a price range.

Discount Zone: The lower 50% of a price range.

2. How Do They Work?

Premium Zone

Price is relatively expensive.

Look for SELL opportunities.

Prefer bearish confirmation before entering.

Discount Zone

Price is relatively cheap.

Look for BUY opportunities.

Prefer bullish confirmation before entering.

3. Important Level: Equilibrium (50%)

The 50% level divides the range.

Above 50% = Premium.

Below 50% = Discount.

4. Example

Suppose BTC moves from $90,000 to $100,000.

High = $100,000

Low = $90,000

Equilibrium = $95,000

Therefore:

$95,000–$100,000 = Premium.

$90,000–$95,000 = Discount.

5. Important Rule

Don't BUY just because price is in Discount.

Don't SELL just because price is in Premium.

Always wait for confirmation using:

Liquidity Sweep

CHOCH

BOS

Fair Value Gap (FVG)

Practice Questions

Q1. What is the Premium Zone?

Q2. What is the Discount Zone?

Q3. If BTC moves from $90,000 to $100,000, what is the Equilibrium level?

Q4. In which zone do traders generally look for BUY opportunities?

Answer these four questions. Then we'll move to Lesson