Premium/Discount — what it is and how to use it in trading
Definition
Premium/Discount is the position of the current price inside the recent swing range, on a 0-to-1 scale: 0.5 is equilibrium (the middle of the range), above it is "premium" (expensive), below it is "discount" (cheap).
How it works in the builder
The premium_discount operand computes the range between the last confirmed swing high and swing low (left/right parameters) and returns the current close's relative position inside it — a number, not a boolean, so it's compared with "<"/">", not "==".
What it looks like on the chart
The range is typically split with horizontal lines at equilibrium (50%) and the premium/discount boundaries (for example, above 70% and below 30%) — the zone itself may be highlighted as a shaded rectangle.
Typical use
A directional filter: buy only in the discount zone of an up-move, sell only in the premium zone of a down-move. Typical condition: premium_discount < 0.3 as an extra filter before a long entry.
Common pitfalls
The range is defined by the most recent swings, so premium/discount is a floating zone, not a fixed one — it recalculates as new swing highs/lows appear and can shift abruptly after a strong impulse. On its own this operand isn't an entry signal, only a contextual filter.
This block is available in the strategy builder
137 no-code blocks — build an entry condition with this term and test it on history
Historical results do not guarantee future ones. The service is an informational and analytical tool, not an individual investment recommendation; trades are not executed.