Premium & Discount Dealing Range

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?

How is the dealing range determined?

What do the BOS and CHoCH labels represent?