Premium and Discount Zones in SMC Trading: How to Identify Entry Areas
In trading, knowing the direction of the market is important, but understanding where price is trading within a particular range can also help traders make better decisions. This is where Premium and Discount Zones become useful in Smart Money Concepts (SMC) trading. These zones help traders analyse whether the current price is relatively high or low compared with a selected price range. Many SMC traders use them alongside market structure, liquidity, Order Blocks, and Fair Value Gaps to identify potential trading areas. In this article, we will explain Premium and Discount Zones, how to identify them on a chart, and how beginners can use them as part of a trading strategy. What Are Premium and Discount Zones in SMC Trading? Premium and Discount Zones are areas within a selected price range. Traders generally identify the range by marking a significant swing high and swing low. The midpoint of this range is often called the Equilibrium (EQ) level. It divides the range into two section...