# Premium and discount — lesson Gym heading: Situational awareness. Written before the code (Sep 8 2026), from the trader's own framework in the Aug 30 2026 transcript by way of `docs/gym-module-premium-discount.md`. The teach screen shows this text; the answer key implements the rule in it and nothing else. Distances are in M everywhere. Harness, confidence, persistence, and reveal format follow stop-vs-noise; the bars come from point-at-the-bar's generator v2 with the session VWAP module's synthetic volume on every bar, and the fixed-range profile counts that volume over the leg's bars only. Choices made where the order was silent: - The chart is 40 to 60 bars (drawn per rep, config range). It has three parts, in order: an opening (generator v2's pre-line phase, rotation, leg or mixed at the family's shares), the impulse leg, and the retrace. The leg runs from the swing that started it to the swing that ended it, both marked with a small triangle: for a leg up, the start is a bar whose low is lower than the lows of the bar on either side and the lowest low of the leg, the end a bar whose high is higher than the highs of the bar on either side and the highest high of the leg. Half the charts are mirrored, so half the legs are down and the marks swap. - The fixed-range profile is the leg's bars and nothing else: from the start swing's bar to the end swing's bar inclusive, each bar's volume spread evenly over its high-to-low range into rows of 0.1 M, the grid anchored at the middle of the leg's range. The POC is the row with the most volume; the value area is the 70% of the leg's volume around the POC, built outward one row at a time, the heavier neighbour first. VAH is the top of the highest value row, VAL the bottom of the lowest. The three lines run from the leg's first bar to the right edge; the histogram is drawn over the leg's bars, anchored at the first. Nothing on the chart is labelled but the three lines and the marks. The last close is extended to the right edge as a dotted line, unlabelled, the way every platform draws the last price. - Price is the last close. Distances are read at two decimals of M, the precision the reveal shows: a close is premium when it sits more than 0.00 M above VAH at that precision, discount when more than 0.00 M below VAL, and middle otherwise, a close on the line included. - The retrace has come back into the leg's range or past it. Past it means beyond the leg's own extreme by up to 0.3 M (config: drill 0.3, holdout 0.4): a poke through the end swing on the premium side, a full retracement and a little more on the discount side. The three answers come up a third each (config). A share of the closes (config: drill 0.2, holdout 0.3) sits within a few hundredths of M of a line on purpose; the reveal shows the numbers either way. - Nothing but the location carries the case. The bar count, the leg's length in bars, its height, the number of bars since the leg ended, the opening's regime, and the shape of the retrace (how deep it went first, and where it turned) are all drawn once per rep before the case is built into the chart and kept across rebuilds, and every rejection during the build applies to every case alike. The harness checks that none of them, nor M, nor the profile's shape (the value area's width, the POC's place in it, which edge has more room to the leg's extreme), carries the case, within 3.5 standard errors of the pool, and prints the bar counts per case for the record. - The next 20 bars are drawn with an outcome rate that is a config constant and is never shown. The reveal says whether price traded back through the leg's POC and where it ended, in M from the nearest edge, in the lesson's own terms. No percentages anywhere. - Soft clock 6 seconds: one look, the last close against two lines. Persistent header: **"Training your eye for location: sell in premium, buy in discount."** ## Before the trigger - **The impulse** — An impulse is a move that starts at one swing and ends at another. Draw a volume profile over just those bars and extend it forward: that fixed range is where the business of the move got done. - **Premium** — Above its value area high is premium. - **Discount** — Below its value area low is discount. - **The middle** — Between them is the middle, where the move's own POC sits. - **The rule** — Sell in premium, buy in discount. In a market making lower value day after day, a rally back into premium is where shorts belong. In a market making higher value, a pullback into discount is where longs belong. Fading from the middle is paying full price for a trade that has neither location nor room. - **Why it matters at the trade** — Decision: location comes before any trigger. If price is not in premium (for a short) or discount (for a long), there is no trade to look for yet, however good the candle looks. - **The value area** — The 70% of the leg's volume around its POC, each bar's volume spread over its range in rows of 0.1 M, built outward from the POC one row at a time, the heavier neighbour first. VAH is the top of it, VAL the bottom. - **What it doesn't say** — Premium or discount is a location, not a signal. It says nothing about which way value is migrating (that is read elsewhere), whether a trigger has printed, whether anyone is trapped at the edge (Trapped or not trapped), or whether the stop survives the noise (Stop vs noise). It says where the last close sits against the value of the last impulse, in M. - **The read** — One look: the last close against the two edges of the leg's value. Above VAH, below VAL, or between them. - **M** — The median high-to-low range of the last 20 bars. Every distance here is in M. The number for the current chart is on the screen. - **Confidence is a number** — Low means 40%, Medium 65%, High 90% that your call is right. Scored Brier-style: sure and wrong costs 0.81, unsure and wrong costs 0.16, sure and right costs 0.01. Being certain is as expensive as being wrong. ## The rep 40 to 60 bars. An impulse leg with both its swings marked and a fixed-range volume profile over exactly those bars, VAH, POC and VAL drawn and extended to the right edge, price retraced into or past the range, frozen on the current bar. M is stated. The words premium, discount and middle are printed nowhere on the chart. The question, in full: **"The leg's value area is drawn. Where is price now?"** Premium, Discount, or Middle, with a confidence. ## The reveal The chart again with the next 20 bars. The distance from the nearest edge in M and the leg's direction, then one takeaway line keyed to the case. Templates: - Premium: **"Price is {d} M above the leg's value. If value is migrating lower, this is where a short has location. Longs here are buying at full price."** - Discount: **"Price is {d} M below the leg's value. If value is migrating higher, this is where a long has location."** - Middle: **"Price is inside the leg's own value area. No location either way. Whatever the candle is doing, this is not where the trade is."** Every rep ends on one of these lines. Each is a decision: this is where a short has location, where a long has location, or not where the trade is. Then what the next 20 bars did, in M. No win percentage is shown anywhere. ## Answer key The profile: the leg's bars only, from the start swing's bar to the end swing's bar inclusive, each bar's volume spread evenly over its high-to-low range into rows of 0.1 M anchored at the middle of the leg's range. POC: the row with the most volume. Value area: from the POC outward, one row at a time, the heavier neighbour first, until 70% of the leg's volume is in. VAH: the top of the highest value row; VAL: the bottom of the lowest. `premium = round2((close − VAH) / M) > 0`; `discount = round2((VAL − close) / M) > 0`; `middle` otherwise. Reported: the distance from the nearest edge in M, and the leg's direction. The three answers come up a third each (config). Nothing but the last close against the two lines carries the case: not the leg's length or height, not its direction, not how many bars the retrace took, not the bar count, not the profile's shape, not M.