Wick

Why you don't buy in premium

Order Blocks & Premium/Discount

A wide, expensive stop

Buying deep in premium means your stop-loss has to travel through the entire remaining discount zone before it's proven wrong, a wide, expensive risk for a shallow reward if it works.

You're trading against natural sellers

Sellers, meanwhile, are naturally more interested in premium prices, they're getting a better rate to sell at. That's exactly the crowd a late buyer in premium is trading against.

The same logic flips for shorts

The same logic flips for shorts: selling deep in discount means fighting the buyers who see that cheap price as attractive, with a stop that has to survive the whole premium zone above.

Check yourself

The main risk of buying a long position deep in the premium zone is…

  1. A wide, unfavorable stop distance relative to the likely reward correct
  2. Paying no spread at all
  3. Guaranteed profit no matter what

A stop that has to clear most of the range makes the risk-to-reward math ugly from the start.

Learn this properly

This term has a full interactive lesson in Wick — the chart, the pattern to tap, and a live practice terminal to try it on. Free to start.

Open the lesson

Related terms