Glossary
Premium and discount
In short
Premium and discount split a price range at its 50% level, the equilibrium. The upper half is premium (relatively expensive), the lower half discount (relatively cheap).
Which range?
Usually the range of the current swing, from the last swing low to the last swing high. Some tools use a fixed number of candles instead, such as the last 100.
How traders use it
Many traders prefer to buy in discount and sell in premium, in the direction of the higher-timeframe trend. Order blocks and fair value gaps in the right half of the range get more attention than those in the wrong half.