> For the complete documentation index, see [llms.txt](https://docs.bigbeluga.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.bigbeluga.com/main-toolkits/market-core-pro-tm/price-action-concept.md).

# Price Action Concept

## FIBONACCI RANGES

Fibonacci Ranges with OTE (Optimal Trade Entry) are powerful tools for identifying high-probability trade entries within key retracement levels, offering opportunities for reversals or trend continuations. 

### Fibonacci Levels

Key levels are 61.8% and 78.6%, which form the OTE zone, where reversals or continuations are likely.

<div align="left"><figure><img src="/files/pTOYGHT7PdPW3jokW1Br" alt=""><figcaption><p>Levels</p></figcaption></figure></div>

### Trend Positioning

**Uptrend**:&#x20;

After a break above a range, the OTE zone lies below the midpoint of the new range, suggesting a buy zone.

<figure><img src="/files/CIJpPpzgEuBScE0fXFYU" alt=""><figcaption><p>Uptrend</p></figcaption></figure>

**Downtrend**:&#x20;

After a break below, the OTE zone lies above the midpoint, suggesting a sell zone.

<figure><img src="/files/rOATa80hQPdxteDFq7RN" alt=""><figcaption><p><strong>Downtrend</strong></p></figcaption></figure>

### **Labels**

The indicator marks these Fibonacci levels with prices, making it easy to spot the OTE area for entries aligned with the trend.

<div align="left"><figure><img src="/files/P26YTGTmcuMSQYDhuPoJ" alt=""><figcaption><p><strong>Labels</strong></p></figcaption></figure></div>

{% hint style="info" %}
In essence, OTE within Fibonacci ranges provides ideal retracement levels for trend-aligned trades.
{% endhint %}

### Golden Pocket (61.8%–65% Zone)

The **Golden Pocket** is the most significant Fibonacci retracement zone, located between the **61.8%** and **65%** levels.&#x20;

<figure><img src="/files/9COwFTFR4IyX4EISauXE" alt=""><figcaption></figcaption></figure>

{% hint style="info" %}
It is widely used in institutional trading models because it represents the optimal retracement point where price most often reacts before continuing its primary trend.
{% endhint %}

## Premium and Discount

<figure><img src="/files/FHEvDmVcNubGzP2MyB50" alt=""><figcaption><p>Premium &#x26; Discount</p></figcaption></figure>

To understand **Premium** and **Discount** zones, it's essential to first grasp the concept of **Equilibrium**:

### Equilibrium (Fair Value)

This is the midpoint of a selected price range, representing the "fair value" within that range. It serves as a reference point to determine whether the price is in a **premium** or **discount** zone.

<figure><img src="/files/KEz3KVqIKBNzvP5sCutq" alt=""><figcaption><p><strong>Equilibrium</strong></p></figcaption></figure>

### Premium Zone

The area **above the equilibrium**. Prices in this zone are considered overvalued relative to the range.&#x20;

Smart money and ICT (Inner Circle Trader) traders often look for **sell opportunities** in the premium zone, especially in a downtrend or after a significant upward movement.

<figure><img src="/files/VQa7oOGJjzawEUaD5ruo" alt=""><figcaption><p>Premium Zone</p></figcaption></figure>

### Discount Zone

The area **below the equilibrium**. Prices in this zone are considered undervalued. Traders typically look for **buy opportunities** here, especially in an uptrend or after a downward movement.

<figure><img src="/files/ikLF3iBF4SUvPbL78DyX" alt=""><figcaption><p>Discount Zone</p></figcaption></figure>

### Entry Zone

Marks the preferred area for entering a trade within the trend. In an uptrend, the entry zone lies in the discount zone below equilibrium; in a downtrend, it’s in the premium zone above equilibrium.

<figure><img src="/files/zLy5wvp7bIzNGmbkmwjx" alt=""><figcaption><p><strong>Entry Zone (Above)</strong></p></figcaption></figure>

<figure><img src="/files/kVlwHiVvfwVHQb1LAHc2" alt=""><figcaption><p><strong>Entry Zone (Below)</strong></p></figcaption></figure>

## Settings

<div align="left" data-with-frame="true"><figure><img src="/files/PX0udDgfUOieuubyKRKv" alt=""><figcaption></figcaption></figure></div>

These settings allow traders to enable different **price action-based tools** within the indicator:

| Settings         | Description                                                                                                                                                                                                                                                                                                                 |
| ---------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Fibonacci Ranges | <p></p><ul><li>Enables automatic plotting of <strong>Fibonacci retracement levels</strong> based on recent price movements.</li><li>The dropdown menu (default: <strong>5</strong>) selects the number to change length calculation.</li><li>Golden Pocket: Enables automatic detection of the golden pocket area</li></ul> |
| Premium Discount | <p></p><ul><li>Highlights areas of the chart based on the <strong>premium (overpriced) and discount (underpriced) zones</strong>.</li><li>Users can customize the <strong>colors</strong> for different sections (green for discount, red for premium, dark for neutral).</li></ul>                                         |