# Premium & Discount Dealing Range Premium & Discount Dealing Range is an indicator on [Vela](https://vela.luxalgo.com/chart), our next-generation charting platform, written in Pine Script®. Anchors the dealing range on the leg that last broke structure, splits it at equilibrium and shades premium above and discount below, with 25/75% quadrants and the 62-79% OTE band. The range ratchets on a BOS and flips on a CHoCH. Marks flag the first trade into discount in bullish ranges (premium in bearish ones), and a dashboard reads price position from 0 to 100%. - Indicator in the LuxAlgo Library, by LuxAlgo, published Jul 8, 2026. - Access: free. - Concepts: [premium & discount](https://www.luxalgo.com/library/concept/premium-and-discount/) (primary), [optimal trade entry](https://www.luxalgo.com/library/concept/optimal-trade-entry/) - Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=s2t195ujxnkjmy754vqnp7xs - Page: https://www.luxalgo.com/library/indicator/premium-and-discount/ The **Premium & Discount Dealing Range** indicator provides a systematic way to identify market equilibrium, helping traders distinguish between premium pricing for selling and discount pricing for buying. By automatically plotting the range between significant swing highs and lows, this tool helps you identify Optimal Trade Entry zones and track structural market shifts in real time. ## How to Trade the Premium & Discount Dealing Range? Trading with this indicator centers on the concept of mean reversion and trend continuation. In a bullish market, the indicator highlights a discount zone below the equilibrium level; this is where institutional interest is often concentrated, providing opportunities to look for long setups. Conversely, in a bearish market, the premium zone above equilibrium offers potential areas to seek short entries. The Optimal Trade Entry (OTE) band serves as a refined filter within the trade side of the range. It represents the area where price has retraced deep enough to offer a favorable risk to reward ratio, but not so deep that it threatens the structural integrity of the trend. Traders should look for price to enter these zones and confirm a reaction before taking action. The range also tracks structural developments like Break of Structure (BOS) and Change of Character (CHoCH). A BOS suggests the continuation of the current trend as the range ratchets forward, while a CHoCH indicates a potential reversal, signaling that the previously protected extreme has failed and a new range is forming in the opposite direction. ## Premium & Discount Dealing Range Settings ### Dealing Range * **Swing Length:** Determines the number of bars required to confirm a swing high or low. Larger values filter out market noise, while smaller values track minor pivots. * **Break Confirmation:** Sets whether a range is considered broken by a candle close or merely a wick penetration beyond the protected extreme. ### Levels * **Quadrants (25% / 75%):** Displays quarter levels within the range to help gauge price depth and exhaustion. * **OTE Band:** Toggles the visibility of the optimal trade entry pocket. * **OTE Band levels:** The two fields beside the OTE Band toggle set the shallow and deep retracement levels of the band, entered as fractions of the leg (0.62 and 0.79 by default). ### Zone Events * **Zone Entry Marks:** Automatically tags the first time price enters the trade side of the range or touches the OTE band. * **Range Re-anchor Labels:** Shows labels when the range resets due to structural breaks or trend reversals. ### Display * **Past Ranges:** Controls how many retired ranges remain visible on the chart for historical analysis. * **Zone Names:** Labels the premium, discount, equilibrium, and OTE zones next to the live price. * **Extend Right:** Specifies how many bars the current range should extend into the future. ### Dashboard * **Show Dashboard:** Toggles a summary table showing current range direction, equilibrium levels, and your current position within the range. * **Position / Size:** Adjusts the layout and scale of the dashboard overlay. ## Frequently Asked Questions ### What is the OTE band? The OTE band is a specialized zone within the dealing range representing a deep retracement, typically between 62% and 79%. It identifies the optimal area to enter a position based on institutional demand or supply dynamics. ### How is the dealing range determined? The range is automatically anchored to the most significant recent swing high and low. As the price moves and creates new structural highs or lows, the indicator logic re-anchors the range to maintain focus on the most relevant price action. ### What do the BOS and CHoCH labels represent? BOS stands for Break of Structure, which marks the continuation of the current trend when the range expands. CHoCH stands for Change of Character, indicating that price has broken the protected extreme, signaling a potential trend reversal. ## Related indicators - [MSS Sweep Fib Retrace](https://www.luxalgo.com/library/indicator/mss-sweep-fib-retrace/) (Optimal Trade Entry): markdown at https://www.luxalgo.com/library/indicator/mss-sweep-fib-retrace.md - [HTF CISD Projections](https://www.luxalgo.com/library/indicator/htf-cisd-projections/) (Standard-deviation Projections): markdown at https://www.luxalgo.com/library/indicator/htf-cisd-projections.md - [ICT Concepts](https://www.luxalgo.com/library/indicator/ict-concepts/) (PD Arrays): markdown at https://www.luxalgo.com/library/indicator/ict-concepts.md - [CISD Projections](https://www.luxalgo.com/library/indicator/cisd-projections/) (Standard-deviation Projections): markdown at https://www.luxalgo.com/library/indicator/cisd-projections.md - [Pure Price Action ICT Tools](https://www.luxalgo.com/library/indicator/pure-price-action-ict-tools/) (PD Arrays): markdown at https://www.luxalgo.com/library/indicator/pure-price-action-ict-tools.md - [ICT NWOG/NDOG & EHPDA](https://www.luxalgo.com/library/indicator/ict-nwog-ndog-ehpda/) (PD Arrays): markdown at https://www.luxalgo.com/library/indicator/ict-nwog-ndog-ehpda.md - [Short-Term Order Block Rejections](https://www.luxalgo.com/library/indicator/short-term-order-block-rejections/) (Smart Money Concepts / ICT): markdown at https://www.luxalgo.com/library/indicator/short-term-order-block-rejections.md - [Smart Money Concepts (SMC)](https://www.luxalgo.com/library/indicator/smart-money-concepts-smc/) (Smart Money Concepts / ICT): markdown at https://www.luxalgo.com/library/indicator/smart-money-concepts-smc.md --- Source: https://www.luxalgo.com/library/indicator/premium-and-discount/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/