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How to Master Premium & Discount For Better EntriesA lot of traders talk about premium and discount, but very few actually know how to use it properly. Most just draw Fibonacci tools on random legs and try to catch reactions at the 61.8% level. That kind of trading lacks structure and context. If you're serious about using Smart Money Concepts the right way, then you need to understand where value exists in the market and how to position yourself accordingly. This guide is all about mastering the premium vs discount model using a 4H bias, entries on the 1H or 15M, and refinements based solely on Fair Value Gaps. No order blocks. No guessing. Just clean structure, displacement, and a focus on institutional logic. Establishing a Valid 4H Dealing Range Your entire analysis starts with the 4H chart. That’s where you define the dealing range, the leg of price that caused a significant shift in market structure, usually confirmed by displacement and a break of a previous swing. To do this correctly: Identify a 4H swing high to swing low (or low to high) that broke structure and created an imbalance. Anchor your range from that swing point to the extreme, this becomes your dealing range. Mark the 50% of this range — this is your equilibrium line. Everything above this midpoint is premium, everything below is discount. You’re not drawing fibs for retracement levels. You’re using them to separate cheap price from expensive price. Premium vs Discount: Why It Matters The logic is simple: institutions buy at discount and sell at premium. They don’t place large positions in the middle of the range, they accumulate when price is cheap and distribute when price is expensive. Once you’ve marked out your 4H range, you now have a framework: Price in discount (below the 50%) = potential buy setups. Price in premium (above the 50%) = potential sell setups. The key is to only look for trades in the right part of the range. If price is in premium and you're trying to long, you're working against smart money. If it's in discount and you're trying to short, you're fading accumulation. Refining the Setup on 1H or 15M Once price enters the zone you’re interested in, premium or discount. Drop to the 1H or 15M charts to look for entries. But we’re not trading any structure or supply/demand zone. We’re only interested in Fair Value Gaps. Why? Because FVGs are the cleanest way to spot imbalance — they show where price moved too aggressively and left inefficiency behind. Here's what to do: Watch for displacement on 1H or 15M once price taps into the 4H premium or discount zone. The move should break short-term structure and leave a clear FVG. Wait for price to retrace into that FVG. Entry is placed inside the gap, preferably in the upper or lower third depending on direction. Your invalidation is the low or high of the displacement move. The FVG gives you a clean risk-to-reward setup that is backed by structure, context, and smart money intent. Example: Long from Discount Let’s say price is trading inside the discount zone of a 4H bullish dealing range. You now drop to 15M and see a sharp move higher that breaks structure and creates a clean 15M FVG. Now you wait. If price retraces into that gap and shows some form of reaction (volume, reaction wick, or small lower timeframe shift), you have a valid long. The trade is high probability because: It’s inside 4H discount The 15M displacement confirms smart money is stepping in The FVG is your refined entry zone Target is always the next liquidity pool inside premium. Example: Short from Premium Opposite logic applies. If price trades into the premium zone of a 4H bearish range, you drop to 1H or 15M and wait for displacement to the downside. When you get a strong bearish move that leaves behind a Fair Value Gap and breaks intraday structure, you mark the FVG. When price retraces into it, you execute your short. Stop is above the displacement high. Target is the first liquidity level inside discount, such as an old low or a clean equal low. Rules for FVG Entries (1H/15M) To keep your execution sharp, stick to these: Only enter FVGs that form from displacement moves. The FVG must break intraday structure. It must form inside the 4H premium or discount zone, no exceptions. Avoid FVGs that form in the middle of the range or during chop. Make sure higher timeframe context supports the direction. This filters out 90% of weak setups and forces you to trade in sync with value. Targets and Exits Where you enter is based on imbalance and structure, but where you exit is based on liquidity and the premium/discount model in reverse. If you long from discount, you should be targeting premium levels. If you short from premium, you should be targeting discount levels. More specifically: Look for old highs/lows Clean equal highs/lows Unfilled FVGs in the opposite zone This way, you’re always exiting into areas where the market is likely to reverse or stall, and not overstaying your trade. Conclusion Trading from premium or discount zones isn’t just a concept, it’s a framework that puts you in line with institutional activity. When you combine it with FVGs, you have a clean, mechanical way to structure your trades. Keep your bias on the 4H. Mark your ranges clearly. Drop to 1H or 15M only when price is in a valid zone, and only take entries on FVGs that form from strong displacement. If you stay disciplined with this model, you’ll avoid chasing price and start trading from areas of true value. ___________________________________ Thanks for your support! If you found this guide helpful or learned something new, drop a like 👍 and leave a comment, I’d love to hear your thoughts! 🚀 Make sure to follow me for more price action insights, free indicators, and trading strategies. Let’s grow and trade smarter together! 📈
CAPITALCOM:US100Education
by TehThomas
66
NZD-CHF Free Signal! Sell! Hello,Traders! NZD-CHF hit a horizontal Resistance of 0.5002 and Its a strong supply area so We will be expecting a local Pullback, which means we Can enter a short trade With the Take Profit of 0.4950 And the Stop Loss of 0.5016 Sell! Comment and subscribe to help us grow! Check out other forecasts below too! Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
Short
by TopTradingSignals
1
Bitcoin - $100k retest before new ATH?Bitcoin has broken out of its 1-hour ascending channel with a sharp bearish displacement, ending the slow grind higher that had been in place since the 9th of May. That channel served as a controlled environment for accumulation and small trend continuation, but the move we just saw confirms that the phase of balance has shifted into a clear retracement. The displacement candle was strong, clean, and aggressive, closing well outside the lower boundary of the channel and taking out multiple internal lows in the process. This wasn’t a weak break, it showed intent. From a market structure standpoint, this confirms that short-term control has shifted to the downside. That move also left behind a visible Fair Value Gap just above current price, which is likely to act as a draw in the coming sessions. Unless that FVG gets reclaimed impulsively, this looks like the beginning of a deeper retracement. Consolidation Structure Prior to the break, BTC was building liquidity inside a clean ascending channel. The highs kept getting swept by small wicks, which hints at repeated inducement and short-term stop hunts. The final push into the top of the channel marked the last bullish attempt, and price immediately reversed after that sweep. The moment it broke structure with a high-volume bearish candle, the entire channel was invalidated and turned into supply. We now have a clean CISD framework in play, price consolidated inside a channel, created inducement near the highs, triggered a stop hunt into the upper end of the range, and then dropped with strong displacement. That displacement not only broke structure but also left behind an imbalance that has yet to be filled. Bullish/Bearish Scenarios Right now, the short-term bias is bearish. The break of structure is confirmed, the Fair Value Gap is still open, and there is a clear inefficiency left behind. I expect price to revisit that gap and then reject to the downside again. That would complete the FVG retest leg and open the door for a move into deeper zones. The next key area of interest is around the $100,000 mark, slightly below the current trading range. That level holds both technical and psychological weight. It lines up with a previous breakout zone, an unfilled imbalance, and likely a large pool of resting liquidity from retail long stops and institutional bids. If we reach that zone, I’ll be watching for signs of strength to suggest that this pullback was a liquidity grab before the next leg up. If we do get that tap into $100K and price responds with bullish displacement from there, the bullish narrative would be back in play. That could easily form the base for a new impulse toward all-time highs. However, if $100K fails to hold and price pushes through without a significant reaction, then we’re dealing with a larger correction, and I’d expect continuation toward lower inefficiencies. Price Target and Expectations First, I expect a small leg up to fill the Fair Value Gap inside the broken channel structure. That area will act as the first test, and if price shows rejection there, I’m looking for continuation toward the $100,000 to $99,500 region. That zone aligns with a clean 1H imbalance and marks the origin of the last strong bullish expansion. If BTC taps into that deeper imbalance and confirms a reversal with clear bullish intent, the stage will be set for a potential breakout into new all-time highs. That’s where I would expect stronger hands to step in and take control. The longer price holds above that $99k zone, the higher the odds we break past the previous high. But if there’s no reaction and price bleeds through $99K, the bullish structure on the higher timeframes would be compromised, and the move could extend toward the mid-$90K range. Current Stance Short-term bearish, waiting for price to retest the FVG inside the previous channel. That will be the first key area where I expect a reaction. If the rejection confirms, I’ll be watching for signs of continuation into $100K. Not interested in chasing price between levels. I’ll either look to short the FVG retest with confirmation or wait for the deeper tap into the $100K zone to look for a long setup. No trades in the middle, only acting at the extremes where the risk-reward makes sense. Conclusion This setup fits cleanly into a classic displacement narrative. Bitcoin broke out of structure with a high-volume move, left behind an FVG, and is now likely preparing for a short retrace before continuing lower. The $100K zone is the main area to watch — that’s where the next high-probability trade opportunity is likely to develop. If bulls defend that zone and we get bullish confirmation, the path to new highs is still intact. But if $99K fails, I’ll be sidelined and looking for the next major level. The structure is clear, the inefficiencies are visible, and the plan is defined. Now it’s just about waiting for price to do its job. ___________________________________ Thanks for your support! If you found this idea helpful or learned something new, drop a like 👍 and leave a comment, I’d love to hear your thoughts! 🚀 Make sure to follow me for more price action insights, free indicators, and trading strategies. Let’s grow and trade smarter together! 📈
by TehThomas
70
GBP-CAD Local Correction Ahead! Sell! Hello,Traders! GBP-CAD keeps growing And the pair is locally overbought So despite our local bullish bias We will be expecting a pullback And a move down after the Pair hits the horizontal resistance Around the 1.8600 area Sell! Comment and subscribe to help us grow! Check out other forecasts below too! Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
Short
by TopTradingSignals
1
GBP-JPY Free Signal! Sell! Hello,Traders! GBP-JPY is trading in an Uptrend and the pair is once Again about to retest a horizontal Resistance level of 193.665 So despite our bullish bias We will enter a local short trade On Monday with the Take Profit Of 192.946 and the Stop Loss Of 193.799 which is slightly Above the upper bound of The wide supply area Sell! Comment and subscribe to help us grow! Check out other forecasts below too! Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
Short
by TopTradingSignals
1