THE LEXICON · PREMIUM & DISCOUNT
Premium & discount
Premium is the half of a dealing range above equilibrium; discount is the half below it. The zones describe where price sits inside one range and nothing more — a filter on position, not a forecast.
The split
Take a range, find its midpoint, and name the halves. Everything above the 0.5 is premium; everything below it is discount. The line itself is equilibrium. Expensive and cheap are the words usually attached, and they mean exactly one thing: high or low relative to this range. Change the range and the labels change with it.
The rule as it is usually taught
In ICT teaching the zones become a filter: longs are considered only in discount, shorts only in premium. It is buy low, sell high made mechanical, with the range deciding what counts as low and high. Used that way it removes a whole category of decision — the long taken at the top of the range because the last candle was green.
Why the filter has content
The reason it is more than a slogan is arithmetic. Stand at the 0.618 of a range measured down from the high. The high is 0.618 of the range away and the low is 0.382 away. Stand at 0.79 and the split is 0.79 to 0.21. A long taken deeper in discount has the far end of the range further away and the near end closer — more distance to the reference objective, less to the point where the range is broken.
The same arithmetic sets the bill. For a random walk with no drift, the chance of reaching the high before the low is the distance to the low divided by the width of the range. From the 0.618, that is about 38 percent. From the 0.79, about 21. The better distance ratio is paid for with a lower hit rate, one for one. That is why THE PRINTS publishes a random-walk baseline beside every result: geometry gives, and geometry takes, and only the difference between the two numbers says anything about the market.
Which range
The zones are only as meaningful as the range they are cut from. ICT practice draws the range between a swing high and swing low on whatever timeframe is being read, which leaves the choice of swing to the trader. This desk removes that choice: the range is the overnight window, 18:45 to 22:03 ET, measured on 1-minute data. Ranges nest. Tonight's discount can sit inside last week's premium, which is why the Penthaus indicator carries last week's range beside the nightly one — as context, not as a second vote.
What it does not tell you
Discount is not a prediction of higher prices. A range can be traded into its discount half and then through its low without ever returning; the zone was correct as a description the whole time. Nor do the zones say when. A price can sit in premium for a session and a half and still be in premium when the range is replaced.
How it gets misread
The common error is reading the label as the trade: price is in discount, therefore buy. The zone was only ever a filter that rules things out. The second error is moving the range to fit the read — choosing a different swing high until the current price lands in the half that agrees with the opinion already held. A fixed window exists to make that impossible.
Where it lives
The zones are cut from the range and read with the levels inside them.
THE NQ DEALING RANGE CLOSES AT 22:03 ET AND PUBLISHES MINUTES LATER, BEFORE THE SESSION — SCORED AFTER, EITHER WAY. SEE THE RECORD → · AUDIT THE CHAIN →