Smart Money Trading Strategy Using Premium and Discount Zones
Market creates two types of zones:
1- PREMIUM ZONE:
In this zone the price is normally above the 50% level and we consider that particular currency pair or stock to be overvalued or in expensive range.
2- DISCOUNT ZONE:
Here when the price level is below the 50% area we consider that stock to be cheap or undervalued.
To understand that concept you need to think exactly like a business man. If you want to sell any product then you will never like to buy it at a high price.You will always wait for the price to come into discount range so that you can buy that product at a good price.
Similarly you will prefer to sell that product when the price goes high.
Trading View Indicator for Discount and Premium Zones
Now please check the above 2 screenshots. I have attached 2 indicators from trading view. The one indicator is kill zone box and the second indicator i have used is smart money concepts by lux algo.
One you attach these indicators then we will understand how to take trades using these both indicators.
ENTRY RULE:
If you see the above screenshot then you can clearly see price reaches the top yellow level which is considered the premium level for the market. This is the level where you should be looking for taking sell positions.
There are 2 ways to take a sell position in the above scenario. Either when the price hits the yellow level and shows a clear rejection then setup a small stoploss above the level. The other way is to to wait for the bearish CHOCH by smart money concepts indicator by lux algo.
If the price shows choch then it means its a double confirmation that price wants to go down.
One More Example:
In this screenshot you can clearly see price hits the lower yellow discount zone and also smart money concepts by lux algo has also shown you choch in green color and that becomes your prefect trade.
High Time Frame Bias
Yes one important thing you need to observe is higher time frame bias like 1 hour and 4 hour. Try your best to trade those discount and premium zones which are according to the higher time frames.
My private developed indicators works perfect for scalping and day trading and they work best to find the higher time frame Bias. Especially Bank indicator and market turning points indicator have successfully converted many of my students into profitable traders.
Market Turning Points Indicator
In order to book the life time version Contact Us On Telegram or email at fxmentor1985@gmail.com