Previous day high swept, then closed back inside. How I handle it.
Posted: Sun Oct 25, 2026 8:54 am
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.