Core Concepts
ICT Premium and Discount: Dealing Range Explained
Premium and discount are terms used in ICT education to describe where price sits within a defined dealing range. The framework can organize directional ideas and preferred entry areas.
Define the dealing range
A dealing range needs an objective high and low. Its midpoint or equilibrium divides the range into upper and lower halves.
Premium and discount
The upper portion is commonly called premium and the lower portion discount. Some ICT traders use the distinction to prefer short ideas in premium and long ideas in discount when other conditions align.
Equilibrium is not a signal
The midpoint is a reference level, not proof that price will reverse there. A strong trend can continue through equilibrium.
Test the full rule
Specify range selection, directional filter, entry condition, stop and target. Compare results with and without the premium/discount filter.
Worked example (hypothetical)
Start by defining the dealing range with a repeatable swing-selection rule, then calculate the 50% midpoint. Mark premium and discount from that range without moving the anchors after price reacts. State whether the location is only a context filter or a required entry condition, and define the independent trigger and invalidation. Compare outcomes for otherwise similar setups with and without the filter. Price can continue through either half of a range; a location label alone does not establish that an instrument is expensive, cheap or due for reversal.
FAQ: Does premium mean sell and discount mean buy?
Not automatically. These labels describe a location relative to a selected dealing range. A trend can continue through either half of the range, so the level is context unless a tested strategy defines it as a filter.
FAQ: What makes a dealing range reproducible?
Specify how the high and low are selected, the timeframe and the conditions that invalidate the range. Do not move the anchors after seeing where price reversed; that introduces hindsight into the test.
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