Premium / Discount
Premium / Discount Zones
Overview
You will learn What is a Premium/Discount Zone, and How to use the settings in the SMC indicator to help show these zones to you automatically. Also provide a Trade Example. Premium Discount FAQ
What is a Premium or Discount?
For high probabilities set-ups, we want price to be in the best area's as possible. To gain probability, in our trading, we are using the Fibonacci tool to see if price is in Premium or Discount.
To calculate if price is in, premium or discount, we use the Fibonacci tool and connect it to the swing high and low.
We buy in Discount and sell in Premium.
Trade Example
In this example below, we have a great short execution. We combine supply with our Fib tool. Price was in premium area and tapped into our supply zone printed by the SMC Indicator.
Premium/Discount Zones - SMC Settings
Go to your settings and scroll down till you see FIB RETRACEMENT. Click on Show Fib Retracements and voilà.
Values
Your 0.5 (50%) will be your EQL (Equilibrium - The center of the range).
Numbers that can be useful for targets: -0.272 and the -0.618 Fibonacci levels. Numbers that can be useful for deep retracements: 0.786 and the 0.618 Fibonacci levels.
FAQ
Fib Retracement not showing? There must be an established Swing High, and Swing Low in order to place the Fib Retracement numbers inside the range.
How can I trade this? We do not trade only using premium or discount. We use S&D and our confirmations beside it to increase or probability.
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