indicator · on price · open source

Premium / Discount Zone

Deepwick · @deepwickv1Updated 2 Oct 2026▲ 0 users

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About

Premium / Discount Zone shades the chart background relative to the 50% midpoint of the recent swing range.

Above 50% = premium (red shade, look for shorts).
Below 50% = discount (green shade, look for longs).
Range derives from the rolling high / low over lookback bars.

Source code

//@version=5
indicator("Premium / Discount Zone", overlay=true)
lookback = input.int(20, "Lookback", minval=5, maxval=100)
rh = ta.highest(high, lookback)
rl = ta.lowest(low, lookback)
mid = (rh + rl) / 2
inPremium = close > mid
bgcolor(inPremium ? color.new(color.red, 90) : color.new(color.green, 90))
p_High = plot(rh, "High", color=color.red, style=plot.style_linebr)
p_Low = plot(rl, "Low", color=color.green, style=plot.style_linebr)
p_Equilibrium = plot(mid, "Equilibrium", color=color.yellow, linewidth=2)
alertcondition(inPremium and not inPremium[1], "Entered premium", "Price entered the premium zone")
alertcondition(not inPremium and inPremium[1], "Entered discount", "Price entered the discount zone")

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