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Premium and discount divide any recent price range, typically measured from a significant swing low to swing high, into two halves using the 50% midpoint. The lower half is considered discount, a cheaper zone where buyers are thought to have the advantage, while the upper half is premium, a more expensive zone favoring sellers. The basic idea is to look for long entries in the discount half of a range and short entries in the premium half, aligning trade location with where price is statistically cheap or expensive relative to its recent swing.
Optimal Trade Entry, or OTE, narrows that idea using Fibonacci retracement levels covered earlier in this module, specifically the 61.8% to 79% zone of a recent swing. This band is treated as the sweet spot for entering in the direction of the larger trend after a pullback, combining the discount or premium concept with a more precise Fibonacci-defined entry window rather than trading anywhere in the cheaper or more expensive half.
Breaker blocks are former support or resistance zones that failed, then flipped roles once price returned to retest them from the other side, similar in spirit to how order blocks were described earlier in the module but specifically tied to a failed structure point that gets revisited and defended in the opposite direction. Mitigation blocks are related but describe a zone where price returns to a prior area of unfilled or partially filled orders, giving large participants a chance to "mitigate," or offset, positions they were unable to complete during the original impulsive move.
All four concepts are meant to be used together and layered on top of the market structure and displacement ideas from the previous lesson, not as standalone signals. A trade idea gains more weight when a discount-zone OTE entry lines up with a breaker or mitigation block and a recent change of character, since each concept is independently weak but more meaningful in confluence.
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