What it is
This idea comes from ICT and smart money concepts. If the market is in an uptrend, buying near the bottom of the last swing gives a better price and a shorter stop than buying near the top. Premium means expensive relative to the swing; discount means cheap.
WickSpeak takes the last two confirmed swing points, draws the two halves and the equilibrium line, and adds the OTE band, a Fibonacci area many traders use to time entries.
How it is calculated
1. Find the two most recent swing points using the swing size setting. 2. Take the higher one as the top and the lower one as the bottom of the range. 3. The midpoint (50%) is equilibrium. 4. Above equilibrium is premium; below is discount. 5. If show OTE is on, shade the band between the 61.8% and 79% levels of the range.
Settings
| Setting | Default | Range | What it changes |
|---|---|---|---|
| swing size | auto | auto, or a fixed 0.25%, 0.5%, 1%, 2%, 3%, 5%, 8%, 12% or 20% | How big a move must be to count as a swing. It decides which range the zones are drawn on. |
| show OTE | on | on or off | Shows or hides the optimal trade entry band. |
How to read it
How to trade it
- 1
Confirm the trend first, for example gold 1 hour making higher highs and higher lows.
- 2
Wait for a pullback into discount, ideally to a fair value gap or order block there.
- 3
Entry trigger: a bullish close in discount, such as a break of structure up on 5 minute.
- 4
Stop: below the swing low that defines the range, for example 8 to 15 points on gold 1 hour.
- 5
Target: the swing high (the top of premium), then beyond it if structure keeps breaking up.
A long taken in discount is proved wrong if a candle closes below the bottom of the swing range.
WickSpeak draws the premium and discount halves, the equilibrium line and the OTE band on the chart, and writes a plain-English reading of where price sits in the range, how to trade it and what would prove it wrong.
Best markets and timeframes
Most useful on 15 minute to 4 hour charts of trending markets such as gold, US30 and NAS100. Pick a swing size that matches the swing you actually trade.
Common mistakes
- Buying discount in a downtrend just because it looks cheap.
- Using a range from a swing size that does not match your timeframe.
- Treating equilibrium as a hard level instead of a reference.
Works well with
Questions traders ask
What are premium and discount in trading?
They are the top and bottom halves of the latest swing range. Premium is above the 50% line and discount below it.
What is equilibrium in SMC?
Equilibrium is the 50% point of the swing range. It marks the balance between premium and discount.
What is the OTE zone?
OTE means optimal trade entry. It is the area between the 61.8% and 79% Fibonacci levels of a swing, used by many ICT traders to time pullback entries.
Should I only buy in discount?
In an uptrend, buying in discount usually gives a better price and a tighter stop. It is a guideline, and strong trends sometimes never pull back that far.