Premium Discount Tool
Automatically divides price ranges into premium, equilibrium, and discount zones—helping you identify optimal buy zones (discount) and sell zones (premium) using ICT methodology.
What It Does
The Premium Discount Tool uses ICT (Inner Circle Trader) concepts to divide price ranges into three zones: premium (expensive), equilibrium (fair value), and discount (cheap). Smart money typically buys in discount zones and sells in premium zones.
This indicator automatically calculates these zones based on recent swing highs and lows, giving you a clear visual reference for where price is "expensive" or "cheap" relative to the current range.
Key Features
Three-Zone Division
Automatically divides the range into premium (upper third), equilibrium (middle third), and discount (lower third).
Dynamic Range Updates
Zones update automatically as new swing highs/lows form—always reflects current market structure.
Equilibrium Line
Marks the 50% level—a key decision point where smart money often flips positions.
Multi-Timeframe Analysis
Use on higher timeframes for swing trades or lower timeframes for intraday scalping—works everywhere.
Main Settings
| Setting | Default | Description |
|---|---|---|
| Swing Length | 50 | Bars used to identify swing highs/lows for range calculation |
| Show Labels | true | Display "Premium", "Equilibrium", "Discount" zone labels |
| Zone Transparency | 80% | Opacity of colored zones (adjust for chart clarity) |
| Premium Color | Red | Color for premium (sell) zone |
How to Use This Indicator
1. Identify the Current Zone
Check where price is currently trading: premium (upper), equilibrium (middle), or discount (lower).
2. Look for Longs in Discount
Smart money buys in discount zones. Look for bullish setups (order blocks, FVGs) when price is in the lower third.
3. Look for Shorts in Premium
Smart money sells in premium zones. Look for bearish setups when price is in the upper third of the range.
4. Be Cautious at Equilibrium
The 50% level is a decision point—price can continue or reverse. Wait for clear directional bias before entering.
Pro Tip: Combine with Fair Value Gap Finder
The strongest entries occur when an FVG forms in a discount zone (for longs) or premium zone (for shorts). Use the Fair Value Gap Finder to stack confluence.
View Fair Value Gap Finder →Installation Instructions
Download the Pine Script file
Click the download button above
Open TradingView Pine Editor
Go to TradingView → Open chart → Click "Pine Editor"
Paste and save
Paste code → Save → Add to chart
Add to chart
The zones will overlay on your chart automatically
Stop Guessing Where to Enter
This indicator shows you premium/discount zones, but you still need to find entries and manage trades. AI PIPS does all that for you—just follow the signals.
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