Previous day high and low
Posted: Fri Oct 30, 2026 5:46 am
Among the simplest reference levels on any chart are yesterday's high and low. Everyone sees them, many have orders there, and price reacts around them often enough to matter.
Breaks of the previous day's extreme can trigger momentum as stops are hit and breakout orders fill. Failed breaks often snap back, trapping late entries.
What helps is looking at how price approaches. A slow grind into the level often indicates absorption, and a fast spike with a quick rejection suggests a sweep. The second pattern tends to give the cleaner reversal trade.
It also matters where in the session the test occurs. A test during the thin Asian hours means less than one during the London open, when real volume arrives.
One more refinement: the high and low should come from a consistent session definition. A New York close cutoff at 5pm gives different extremes than a midnight server time cutoff, and mixing the two quietly shifts levels by several pips. Picking one definition and sticking with it keeps the marked lines honest, and also keeps backtests comparable with live results over months rather than days.
Are previous day extremes marked every session, and what behaviour counts as a valid reaction?
Breaks of the previous day's extreme can trigger momentum as stops are hit and breakout orders fill. Failed breaks often snap back, trapping late entries.
What helps is looking at how price approaches. A slow grind into the level often indicates absorption, and a fast spike with a quick rejection suggests a sweep. The second pattern tends to give the cleaner reversal trade.
It also matters where in the session the test occurs. A test during the thin Asian hours means less than one during the London open, when real volume arrives.
One more refinement: the high and low should come from a consistent session definition. A New York close cutoff at 5pm gives different extremes than a midnight server time cutoff, and mixing the two quietly shifts levels by several pips. Picking one definition and sticking with it keeps the marked lines honest, and also keeps backtests comparable with live results over months rather than days.
Are previous day extremes marked every session, and what behaviour counts as a valid reaction?