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Welcome forex traders! Are you tired of missing profitable opportunities? Do you struggle to identify the right entry and exit points? This blog post will equip you with powerful market timing techniques using the concepts of “premium” and “discount.”

This strategy, derived from institutional trading and smart money concepts, can significantly enhance your forex trading experience.

Understanding Premium and Discount

Imagine a market range with a high and a low point. The area in between represents a “balance zone.” This zone can be further divided by using the Fibonacci retracement tool.


The region above the 50% retracement level is considered “premium.” This signifies a potential selling opportunity.


A “discount” is a region below the 50% retracement level. This suggests that there might be a purchasing opportunity.

Trading with Market Sessions

The foreign exchange market operates without a break, but not all sessions are equal and depend on different time zones. Here’s a breakdown of important trading sessions:

Integrating Analysis Techniques

Let’s now integrate session analysis with the premium/discount ideas to find high-probability trades. Here’s a methodical approach:

  1. Identify the Market Range: Find the most recent high and low for a currency pair.
  2. Draw the Fibonacci retracement: Use the Fibonacci retracement tool between the high and the low positions.
  3. Analyze Market Context: Look at the prevalent trend over a longer timescale (for example, a daily chart).
  4. Look for Session Overlap: Identify areas where sessions overlap, as they often experience increased volatility.
  5. Identify Premium/Discount Zones: Define the “premium” and “discount” zones based on the retracement level.
  6. Take Your Position: Look for price action during your preferred trading session to enter trades within the premium/discount zones.
    • Buy-in Discount: If the price falls into the “discount” zone during your session, consider a long (buy) position.
    • Sell in Premium: If the price reaches the “premium” zone during your session, consider a short (sell) position.

Things to Remember:

If you stay focused on these paramount, there will be high chances to recognize high-probability trading chances and make wise choices in the forex market.


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