ICT PD arrays explained: premium, discount and the PD array matrix

Why premium and discount matter

Every trader knows the advice to buy low and sell high. The hard part is knowing what “low” means today. ICT’s answer is to measure it against a range. Once you know the range, you know whether price is cheap or expensive inside it, and you need no oscillator to tell you price is overbought.

This changes where you enter. A buyer who waits for price to come back into the lower half of the range gets a better price, a tighter stop and more room to the target than one who buys after a rally. In his first mentorship month ICT says plainly that his best buys come at equilibrium or below.

Premium and discount tell you which half to work in. The arrays tell you where in that half to look.

How to find premium, discount and the arrays, step by step

1. Pick a range. Find a clear swing low and a clear swing high on the chart you trade from. ICT calls this the dealing range. In later lessons he adds that a real one has taken liquidity on both sides: stops above an old high and below an old low.
2. Mark the middle. Measure from the lowest wick to the highest wick and draw a line at 50%. That line is equilibrium.
3. Name the halves. Above equilibrium is premium, below it is discount.
4. Choose a side from your bias. Expecting higher prices? Only buy discount arrays. Expecting lower prices? Only sell premium arrays. If you have no view, you have no trade.
5. List the arrays in that half. Look for old highs and lows, order blocks, fair value gaps, breakers and the rest. If none is there, wait: ICT says an array is either on the chart or it is not, and you never force one.

The PD array matrix: ICT’s ranked list

In his 2017 lesson on higher timeframe PD arrays, ICT ranks the areas he expects inside a range. Reading from the top of the range down to equilibrium, the premium side runs:

1. Old high or old low: a previous swing point, where stop orders rest beyond it.
2. Rejection block: a swing high with long wicks; the block sits at the candle bodies, just under the wicks.
3. Bearish order block: the last up-close candle before a sharp move down.
4. Fair value gap and liquidity void: ranges price crossed so fast that one side barely traded.
5. Bearish breaker: price takes an old high, then breaks the swing low before it; the last down-close candle of the run up to that high becomes resistance.
6. Mitigation block: like a breaker, but the second high fails to clear the first; it sits closest to equilibrium.

The discount side mirrors it from equilibrium down: mitigation block, bullish breaker, liquidity void, fair value gap, bullish order block, rejection block and, at the bottom, the old low. He adds one priority: if a breaker exists, expect price to respect it instead of reaching the arrays beyond it. The same list applies on the monthly, weekly and daily charts.

In his swing trading lessons ICT also uses the word matrix more loosely. Every array above the current price belongs to the premium spectrum, every array below it to the discount spectrum, and price tends to reach for the opposite side once it has used one. For more on each term, see the ICT glossary.

An NQ example, step by step

1. The low (08:15): NQ drops to 24,812.50. This is the bottom of the range.
2. The high (09:30): a fast rally runs to 25,012.50. On the way, the 08:45 candle leaves a bullish fair value gap between 24,850.25 (the high of the candle before it) and 24,862.75 (the low of the candle after it). The range is now 200 points, and its middle, equilibrium, is 24,912.50.
3. The return to discount (10:45): price falls back through 24,912.50 into the discount half and trades into the gap, down to 24,857.25. It stays above the gap’s midpoint, 24,856.50. A buyer here has a discount array in the right half, with a stop under the gap and the range low far below.
4. The run (12:15): price rallies back through equilibrium and through the old high at 25,012.50, to 25,034.25. The stops above that high were the obvious target.

Notice what a premium-and-discount trader skipped: buying at 24,970 on the first pullback (still premium) or at 24,910 on the way down (just under equilibrium, with no array). The plan only allowed one place to buy. The futures position size calculator turns that stop distance into a contract size.

Stacking timeframes

ICT rarely uses one range on its own. In his 2017 swing lessons he looks for a daily discount array that sits inside a weekly discount array, while the monthly and weekly charts point up. For day traders the same idea shrinks: the daily or hourly range gives the halves, and a 5- or 15-minute array inside the right half gives the entry. His optimal trade entry, a pullback to between 62% and 79% of the last swing, is a deeper zone inside that same discount or premium half.

How ICT’s explanations changed over the years

The core idea has not changed, but the details have, and different sources quote different versions:

• 2016: premium, discount and equilibrium are taught on single price swings, with a Fibonacci tool, before the word PD array appears.
• 2017: the ranked matrix above, built for higher timeframes. The order he gives for the premium and discount sides is not perfectly symmetrical (gap and void swap places), so lists online differ.
• 2022 to 2024: the focus moves to intraday dealing ranges. He says every trade idea must come from its current dealing range, and later that a range only counts once both sides of liquidity have been taken.
• 2025: he grades the last 20 trading days’ high and low into quarters and says the high-probability arrays are the ones sitting on those quarter levels, a more mechanical filter than the 2017 ranking.

If two teachers disagree on the order of the matrix, they may both be quoting ICT from different years.

Common mistakes

• Buying a discount array while the bigger picture is bearish.

  Premium and discount only tell you where; the direction comes first. In a bearish market ICT sells premium arrays and leaves the discount side alone.

• Drawing the range from any two random points.

  Use a clear swing high and swing low, measured with the wicks. A range drawn from a minor wiggle gives a meaningless 50% line.

• Calling every candle an order block.

  An array needs a reason: a sharp move away from it, often leaving a gap. A down candle with nothing after it is just a candle.

• Selling just because price reached a discount array.

  ICT warns that discount arrays resist lower prices. Selling into one is fighting the level, not trading it.

• Keeping the old range after price breaks it.

  When price takes the high or low, the range resets. Redraw it and find the new equilibrium before the next trade.

How to journal PD arrays in daqverse