Premium and discount

Premium and discount split a trading range in half into an expensive and a cheap side relative to its midpoint (equilibrium, the 50% level). The zone above the midpoint is premium, where price is considered expensive and selling takes priority; the zone below is discount, where price is cheap and buying takes priority. The midpoint itself acts as the point of equilibrium.

The logic rests on it being better to buy in discount and sell in premium rather than the reverse. So zones of interest — order blocks, imbalances — are weighed by which half of the range they sit in: an order block in discount within a bullish structure carries more weight than the same block in premium. It is a context filter, not a standalone entry point.

In our method premium and discount work inside a mapped trading range: the range boundaries are fixed at the open of a new structure, and the equilibrium between them helps judge whether price is on the expensive or the cheap side. The Trade Model indicator marks the range boundaries from which equilibrium is measured.