Learn Structure Premium / Discount & Equilibrium
Premium / Discount & Equilibrium
Every range has a fair price at its midpoint — buy below it (discount), sell above it (premium).
Anchor the dealing range on the most recent significant leg — swing low to swing high, preferably extremes that swept liquidity. The 50% level is equilibrium (EQ).
Above EQ price is trading at a premium; below it, at a discount. The ICT rule is retail wisdom enforced with discipline: longs are only A-grade from discount, shorts only from premium — never chase in the expensive half.
Every PD array (FVG, OB, breaker...) inherits a premium or discount tag from where it sits in the range, which is how zones get ranked against each other.
How to trade it
- Mark the active range and its EQ before planning any trade; know instantly which half price is in.
- Skip longs above equilibrium and shorts below it, however pretty the zone looks.
- Re-anchor the range when a new confirmed swing extends the leg.
Pitfalls
- Drawing the range from arbitrary candles instead of meaningful swing extremes.
- Buying a bullish FVG that sits in deep premium — right tool, wrong half of the range.
See Premium / Discount & Equilibrium detected live.
The workstation marks it on the chart the moment it prints.