Premium & Discount

OHLC Range Map Premium & Discount

Learn how to identify premium and discount zones to spot areas where price may reverse. These zones highlight when the market is potentially overbought or oversold.

Bullish Bias

In simple terms, prices below the opening are considered discount, while prices above the opening are premium.

With a bullish outlook, the goal is to buy when price is in a discount zone—essentially when it’s cheaper. Statistically, the session low (or the candle’s low) tends to align with the [+]Manipulation ([+]M) level.

Within this structure, three potential buying zones can be defined:

• Discount: Any price below the opening level

• Deep Discount: Price drops below the [+]M level, exceeding the typical downside range before a bullish reversal

• Very Deep Discount: Price moves below the [-]Distribution level, which marks the statistical low of bearish sessions—indicating heavily oversold conditions

Bearish Bias

In a bearish scenario, prices above the opening are considered premium, and the focus shifts to selling at higher (more expensive) levels. The session high (or candle high) often aligns with the [-]Manipulation ([-]M) level.

Similarly, three selling zones can be outlined:

• Premium: Any price above the opening level

• Deep Premium: Price rises above the [-]M level, surpassing the usual upward range before reversing downward

• Very Deep Premium: Price exceeds the [+]Distribution level, the statistical high of bullish sessions—suggesting overbought conditions

Liquidity Pools & Manipulation Levels

Combining liquidity pools—such as session highs/lows or previous day highs/lows—with manipulation levels can significantly improve trade setups. These areas often attract liquidity, and when price reaches them near a manipulation level, large orders can trigger strong reversals.

• Liquidity Sweeps & Reversals: When price breaks a key level (like a session high/low) and aligns with a manipulation level, it may signal a high-probability reversal as liquidity is taken and momentum weakens.

• Extreme Zones: If price reaches extreme premium or discount levels while interacting with liquidity pools, it may indicate exhaustion and a potential turning point.

By combining these concepts, traders can better identify high-probability opportunities where institutional activity may drive significant price movements.