Smart Money Premium / Discount Zones by MadScientist

Premium / Discount Zones by MadScientist — Description



This indicator plots Premium, Equilibrium, and Discount zones based on any timeframe you choose.
It lets you view higher-timeframe bias (1H, 4H, Daily, etc.) while trading on lower timeframes like 5m or 10m.

The script automatically:

Scans the selected timeframe

Finds the recent price range (highest high & lowest low)

Draws:

Premium Zone (where price is expensive → sell/short area)

Equilibrium Zone (fair value)

Discount Zone (where price is cheap → buy/long area)

The zones automatically extend to the current bar and update as new price action forms.

This tool is perfect for Smart Money Concepts (SMC) traders who want to:

✔ See HTF buy/sell zones on any chart
✔ Avoid entering trades in premium while targeting discount
✔ Align entries with market structure and liquidity zones
✔ Get cleaner directional bias without the clutter of a full SMC indicator

Simple, fast, and clean:
HTF zones on LTF charts — SMC made easy.

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📘 How to Trade It (Simple Guide)

This tool shows where price is expensive, where it is fair, and where it is cheap—based on any timeframe you select (1H, 4H, Daily, etc.).
Use these zones to align trades with Smart Money Concepts (SMC) principles.

1️⃣ Premium Zone (Sell Area)

When price is inside the Premium Zone, it means price is expensive.
This is where institutions typically look for:

Shorts

Sell positions

Taking profit on longs

Reversal setups

CHoCH / BOS confirmations

Idea:
Wait for bearish confirmation (break of structure, rejection wick, FVG, OB mitigation) → enter short.

2️⃣ Discount Zone (Buy Area)

When price is inside the Discount Zone, it means price is cheap.
This is where institutions often look to:

Go long

Accumulate positions

Hunt liquidity

Fill imbalances

Break swing highs

Idea:
Wait for bullish confirmation (BOS up, FVG, OB, swing low hold) → enter long.

3️⃣ Equilibrium (Fair Value Area)

The Equilibrium Zone is the middle between Premium and Discount.
This is the “no man’s land” where price is fairly valued.

Idea:
Avoid opening new positions here.
Wait until price reaches Premium or Discount to get a cleaner edge.

4️⃣ HTF + LTF Combo (Best Use)

Example:

Zones set to 4H

Trading on 5m / 10m

Then:

Use 4H zones to know where the BIG money wants to buy/sell

Use 5m/10m to enter with precise confirmation (BOS, CHoCH, OB, FVG)

This filters out bad trades and improves your risk–reward.

⚠️ Disclaimer

This indicator does NOT guarantee profits.
It is a tool, not financial advice, and is meant only as a guide to help identify potential areas of interest based on market structure and price behavior.

Always combine it with risk management, confirmation signals, and your own analysis.
Trading involves risk — only trade with money you can afford to lose.