Premium & Discount zones highlight three specific price areas, one upper area (premium), one central area (equilibrium), and one lower area (discount).

These areas can be used to know when an event is occurring at a premium, discount, or within an equilibrium zone.

If a condition indicative of an uptrend occur within a discount zone then it would have an higher chance of being the cause of a reversal, this also applies for a condition indicative of a downtrend occurring within the premium zone.

Additionally, each area can be used as a support or resistance.