What is Premium & Discount Zone?
Premium & Discount are zones for traders to make profits in the Forex market. They use the principle of buying low and selling high, or buying at a low price and selling at a high price, to achieve the best entry points for profits and maximize their gains.
How to use Premium & Discount Zone
Normally, when opening an order as the price chart moves in one direction, traders will open an order to profit according to the market trend without considering whether the price at that moment is in a cheap or expensive range where they should be making a profit. The use of the Premium & Discount Zone can greatly address the best entry points for orders.
To find the Premium & Discount Zone, you can easily do it in Tradingview > Fibonacci > Then select the numbers 0, 0.5, and 1. These can be used to find entry points for profit in both uptrend and downtrend markets.
Using the Premium Zone in a downtrend
While the graph is in a downtrend, we will use the Premium Zone to find entry points after the graph has retraced upwards and then comes back down again, to identify a new retracement of the downtrend. We will draw Fibonacci from the latest Swing High to the latest Swing Low, and wait for the price to surge up to touch the Premium Zone before placing a Sell order at the highest price.
Using the Discount Zone in an uptrend
Or if we take the literal meaning, a gravestone is a candlestick with little or no wax at the bottom of the wick. The characteristic of this candlestick indicates that the price opened low, then rose, but could not close and fell back to close at the same point as the opening.
While the chart is in an uptrend, we will use the Discount Zone to find entry points after the chart pulls back and then rises again. This is to identify a new pullback in the uptrend. We will draw Fibonacci from the latest Swing Low to the latest Swing High, and wait for the price to pull back to the Discount Zone before placing a Buy order at the lowest price.
