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Previous day high swept, then closed back inside. How I handle it.

Posted: Sun Oct 25, 2026 8:54 am
by Shadow Trader
This is one of the cleanest repeating patterns on liquid pairs. Price runs through the previous day high, tags it by a few pips, then closes back below on the hourly. Many traders short instantly, and many get stopped because the move was not finished. What I do instead is wait for two things after the sweep: a lower timeframe break of structure to the downside, and a retest of the origin of that break. Only then do I enter, with the stop above the sweep high. The target is the nearest internal liquidity, often the session low or the previous swing low. I do not aim for a big move. A one to two R trade is typical here. I also check whether the sweep happened into news. If it did, the move can be distorted and the structure unreliable, so I stay out. The pattern works best on quiet days with a clean prior range, not on days where the daily candle is already enormous.

Re: Previous day high swept, then closed back inside. How I handle it.

Posted: Tue Oct 27, 2026 7:43 pm
by FXS HongKong Scalper
Waiting for the lower timeframe break and the retest costs some of the move, but it removes the trades where the sweep was just the first step of a bigger push. One tweak I use: if the previous day high was swept during the Asian session rather than London, I treat it as weaker. Asian sweeps of the prior day high on EURUSD often get taken again in London before the real reversal. The London sweep is usually the one that holds.