ICT Premium/Discount

The ICT Premium/Discount indicator visualizes price equilibrium by plotting high, low, and median levels over a specific historical period to identify institutional discount and premium zones.

Usage

The indicator is used to identify whether the current market price is in a "Premium" (overvalued), "Discount" (undervalued), or "Equilibrium" (balanced) state relative to a defined lookback period.

• Premium Zone: The area between the highest point and the middle line. When price is in this zone, traders often look for sell setups as price is considered expensive.
• Discount Zone: The area between the lowest point and the middle line. When price is in this zone, traders look for buy setups as price is considered cheap.
• Equilibrium: The middle line itself, representing the 50% retracement level of the high-low range.

A vertical dotted line marks the start of the lookback period, helping users visualize the exact range used for the calculations.

Details

The script calculates the highest high and lowest low over a rolling period. By default, it uses a 30-day lookback calculation adjusted for the chart's current timeframe.

The core logic divides the range into two halves:

1. Premium: Top 50% of the price range.
2. Discount: Bottom 50% of the price range.

The indicator dynamically updates the horizontal lines on the most recent bar to extend forward, providing real-time levels for intraday or swing trading execution.

Settings

Visuals

• Color/Style for the highest point: Customizes the appearance of the Premium boundary.
• Color/Style in the middle: Customizes the appearance of the Equilibrium line.
• Color/Style for the lowest point: Customizes the appearance of the Discount boundary.
• Width of the lines: Adjusts the thickness of all plotted lines in pixels.

FAQ

How do I access ICT Premium/Discount?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

Why are my lines in a separate window?

If the lines appear in a separate pane, right-click the indicator name and select "Move to -> Existing pane above" to overlay them on your price candles.

How is the lookback period determined?

The indicator calculates a specific number of bars based on a 30-day window, ensuring the range remains consistent across different timeframes like the 1H, 4H, or Daily charts.