The ICT PD Array or "Premium and Discount Zones" is a structured approach used to identify optimal entry points in trading.
By leveraging this checklist, traders can determine the most efficient prices for buying and selling within the market.
What Are Premium and Discount Zones?
- Discount Zones: Prices in the lower half of the range are used to identify buying opportunities and set targets for sellers (Take Profit)
- Premium Zones: Prices in the upper half of the range are used to identify selling opportunities and set buyer targets (Take Profit)
Benefits of Using the PD Array
Using the PD Array enhances market analysis and improves decision-making.
Key benefits include:
- Identifying Buy and Sell Areas: Splitting the market into premium and discount zones; it highlights optimal buying and selling prices
- Better Trade Timing:
- This strategy enhances trade timing by emphasizing purchases in discount zones during uptrends and sales in premium zones during downtrends
- Increased Precision: Combines ICT tools for improved accuracy in identifying entry and exit points
- High-Probability Trades: Enables traders to enter high-probability trades while avoiding high-risk positions
Types of PD Array in ICT
ICT PD Array comprises essential tools to identify optimal entry and exit points. These tools provide traders with a deeper understanding of price movements.
PD Array Tools
- ICT Fair Value Gap (FVG) Identifies gaps in price balance
- ICT Inversion Fair Value Gap Highlights order blocks
- ICT Order Block Focuses on breakout blocks
- ICT Breaker Block Highlights recovery zones
- ICT Mitigation Block Marks reversed fair value gaps
- ICT Unicorn Unique analytical patterns
- ICT NWOG New Week Opening Gap
- ICT NDOG New Day Opening Gap
How to Identify PD Array Zones?
To identify Premium and Discount zones, use the Fibonacci tool with the following settings:
- 1 (Start)
- 0.5 (Equilibrium)
- 0 (End)
Steps
- Draw Fibonacci from a price high to a price low
- The0.5 level marks the equilibrium point (50% of the range)
- Area above0.5 is the Premium Zone (expensive)
- Area below 0.5 is the Discount Zone (cheap)
How to Use PD Array?
To use a PD Array (Premium-Discount Array), follow the steps below:
Bullish Scenario
- If the price shifts to an upward structure and lies in the Discount Zone, enter a Buy
Bearish Scenario
- If the price shifts to a downward structure and lies in the Premium Zone, enter a Sell
Best Timeframes for Premium and Discount Zones in ICT
- Daily Timeframe: Identify overall market direction
- 15-Minute and 5-Minute Timeframes: Find precise entry points
Which Markets Are Suitable for PD Array?
Originally designed for major indices like NASDAQ (NQ Futures) and S&P 500, this strategy has demonstrated high accuracy and efficiency.
Over time, it has been adapted to other markets, including:
- Forex: Major currency pairs like GBP/USD and EUR/USD
- Precious Metals: Proven effectiveness in markets like Gold (XAU/USD)
Buy Trades in PD Array
- Use higher timeframes (e.g., 1 day, 4 hours) to determine market trends
- If the trend is bullish and the price is in the Discount Zone, use ICT tools to confirm the uptrend and enter Buy trades
Sell Trades in PD Array
- Use higher timeframes (e.g., 1 day, 4 hours) to determine market trends
- If the trend is bearish and the price is in the Premium Zone, use ICT tools to confirm the downtrend and enter Sell trades
Advanced Tips for Using PD Array
- Multi-Timeframe Analysis: Align multiple timeframes for consistent analysis
- Market Structure Confirmation: Ensure alignment with market trends
- Tool Confluence: Combine PD Array with other ICT tools
- Trend Identification: Accurately analyze market direction
Conclusion
The ICT PD Array is a powerful, structured method for analyzing and executing trades.
Integrating advanced tools and modern techniques allows traders to analyze markets with precision, manage risk effectively, and achieve consistent success.
