Premium and discount: buy cheap, sell dear, inside the dealing range
Premium and discount is how ICT answers a simple question: is this a good price to buy or to sell. The method takes a clear swing, splits it at the 50 percent equilibrium, and calls everything above premium and everything below discount. In a bullish draw you want to buy in discount; in a bearish draw you want to sell in premium. Layer the arrays from the last modules into those halves and you have a ranked map of where delivery should react. This is the glue that turns individual tools into a decision.
The dealing range
A dealing range is the span between a clear swing high and a clear swing low that price is currently working inside. You pick the range that frames the move you are trading: a daily range for a daily bias, an H1 range for an intraday entry. Everything that follows, equilibrium, premium, discount, and the arrays, is measured against this range. Pick it honestly from obvious swing points, not from levels that flatter the trade you already want.
Equilibrium
Equilibrium is the 50 percent of the dealing range, the fair price of the move. Above it, price is expensive; below it, cheap. ICT treats equilibrium as a decision line: in a healthy bullish move, pullbacks that hold at or below equilibrium are constructive, while a move that spends its time above equilibrium on a long is poorly priced. Draw equilibrium first on any range, because it instantly tells you whether you are being offered a premium or a discount.
Premium and discount
The half above equilibrium is premium; the half below is discount. The rule is almost embarrassingly simple: in a bullish draw, look to buy in discount; in a bearish draw, look to sell in premium. It is the discipline that keeps you from buying the top of a move or shorting the bottom. When price offers you a bullish array in the discount half, that is the aligned trade. A bullish array sitting up in premium is a worse price, even if the pattern looks identical.
Stacking PD arrays
Now layer the tools. Inside the discount half you might have an order block, a fair value gap and a breaker all pointing the same way. When several price delivery arrays stack at the same price, ICT calls it confluence, and the level is stronger. The arrays are also ranked by how deep they sit: a discount array near the low of the range is a better long than one near equilibrium. You are not hunting for one magic array; you are reading where several agree inside the correct half.
Where to buy and where to sell
Put the pieces together into one habit. Identify the draw (bias). Draw the dealing range and its equilibrium. In a bullish draw, ignore premium and wait for price to deliver into a discount array, ideally after a sell-side raid. In a bearish draw, ignore discount and wait for a premium array after a buy-side raid. The entry is then the smaller-timeframe trigger from earlier modules. This single filter removes most of the trades that look clever but are badly priced.
Premium and discount on gold
Gold respects these levels well on clean H1 and H4 ranges, especially the equilibrium of the day's range and the 50 percent of the prior day. A common sequence: London delivers into discount and holds, then New York prices the move back up toward premium where it meets a sell array. Use the previous day high and low to frame the range when intraday structure is messy. And never let a pretty pattern tempt you into buying premium in a bullish draw; wait for the discount.
FAQ
What is equilibrium in ICT?
It is the 50 percent midpoint of a dealing range, the fair price of the move. Above equilibrium is premium (expensive), below is discount (cheap). It is the first line to draw because it instantly shows whether you are being offered a good price.
What does buy in discount, sell in premium mean?
In a bullish draw you only look to buy when price is in the discount half of the range, below equilibrium. In a bearish draw you only look to sell in the premium half, above equilibrium. It keeps you from buying tops and shorting bottoms.
How do I choose the dealing range?
Pick a clear, obvious swing high and swing low that frame the move you are trading, on the timeframe you are trading. Use a daily range for a daily bias and an H1 range for an intraday entry. Be honest; do not pick levels that flatter the trade you want.
What is confluence of PD arrays?
It is when several price delivery arrays, such as an order block, a fair value gap and a breaker, stack at the same price. The more arrays that agree at one level in the correct half of the range, the stronger that level is as an entry.
Does premium and discount replace the other tools?
No, it ranks them. Premium and discount tells you which half of the range to trade from; the order blocks, fair value gaps and breakers are the actual entries inside that half. Used together they turn separate tools into one priced decision.