Kardec Trader's YouTube tutorial explains 'premium versus discount' within a market range: split the range roughly 50/50 into a lower 'discount' zone (bottom of range) where buying/closing shorts is higher-probability, and an upper 'premium' zone (top of range) where selling/initiating shorts is preferred. The speaker summarizes the heuristic as: buy cheap, sell expensive.
The last concept we're going to cover before we put it all together here is premium versus discount in a range we can bifurcate it into a half point 50% here. The idea of premium versus discount very simply is that discount exists at the bottom of the range Premium exists at the top of the range. If you think about this logically what do you want to do at a discount? Well I want to buy so that means longs probably higher probability in the lower part of the range. If I'm short where do I want to close those shorts? Well I want to close them where the buying occurs the disc lower part of the range. The inverse is of course true for the upper part of the range. If you want to sell something I want to sell it at premium so I'm selling in the upper part of the range short here, buy there. I like to think of it as like I want to buy cheap I want to sell when it's expensive okay.
