Premium Discount Zones Indicatore

This indicator is designed to help you identify key areas based on recent market highs and lows. It analyzes a configurable period of past bars to determine a general price range, calculates a midpoint equilibrium, and divides that range into two main zones:

🔺 Premium (Upper Zone)
🟩 Discount (Lower Zone)

It also evaluates trading volume in those bars to calculate a "Volume Delta", which represents the percentage of volume associated with bearish movements.

What Is It For? 💡

This indicator helps you spot areas where the price might be:

📈 Overvalued (Premium Zone) → Potential for selling or taking profits
📉 Undervalued (Discount Zone) → Potential for buying or accumulation

It provides a quick view of market imbalances, highlighting whether recent volume favors bullish or bearish moves. The extended structural zones project key levels beyond the immediate range, useful for planning trades in trends or reversals. 🚀

Perfect for strategies targeting consolidation ranges, breakouts, institutional trading, or liquidity analysis!

How to Interpret It? 🔍

🟣 Premium Zone (Purple, Above Equilibrium) → Upper range, where price is considered "expensive."
🟢 Discount Zone (Green, Below Equilibrium) → Lower range, where price is seen as "cheap."
⚖️ Equilibrium Line (Gray, Middle) → Marks the range’s midpoint, acting as a balance level. A price crossover here may signal a bias shift.
📊 Volume Delta (Center) → Shows bearish volume % (🔴 >50% = bearish, 🔵 <50% = bullish).
🏛 Structural Zones (Shaded Extensions) → Extended areas above/below range extremes, acting as long-term support/resistance with a buffer based on recent price action.

The indicator dynamically updates these zones on recent bars, extending rightward for future projections.

How to Use It in Trading? 🛠️

Initial Setup:
- Enable PD levels (main) and structural zones if desired.
- Adjust lookback periods:
- - Short (e.g., 50 bars) → Recent ranges
  - Long (e.g., 200 bars) → Structural context
Chart Analysis (e.g., H1 Timeframe):
- Check if price is in 🟣 Premium (consider selling with bearish confirmation) or 🟢 Discount (consider buying with bullish confirmation).
- Use Volume Delta for confirmation:
- - 🔴 >50% → Favors shorts in Premium
  - 🔵 <50% → Favors longs in Discount
Entry & Exit Strategies:
- 🟢 Buy in Discount Zone: If price enters green zone & delta is low, look for long entries with stops below the zone’s low and targets at equilibrium or Premium.
- 🟣 Sell in Premium Zone: If price reaches purple zone & delta is high, consider shorts with stops above the zone’s high and targets at equilibrium or Discount.
- 🏛 Use Structural Zones for longer-term trades, applying the buffer as an error margin.