PDH / PDL (Previous Day High / Low)

Previous day high and previous day low are yesterday's extremes, and what makes them useful is that they are finished. They do not move. You mark them once before your session and they sit there as fixed reference all day, while today's HOD and LOD are still crawling around. They pull price for the same reason any liquidity pool does. They are obvious, and the whole market is looking at the same two lines. Yesterday's losing positions have stops beyond them. Breakout orders have entries beyond them. That is a concentration of resting orders at a level everyone agrees on, which is exactly what a large participant needs in order to get filled. Which is why the shape you will see again and again is a sweep: a wick through yesterday's extreme, the orders beyond it get run, then a close back inside. The sweep and the reclaim are the setup. The level on its own never was. When price sweeps PDH and prints a rejection candle back inside, you have what the system asks for, and because the sweep supplies its own confirmation, divergence becomes a bonus rather than a requirement. Three things that do not get suspended just because the level is famous: - **PDH/PDL is not automatically protected structure.** Your stop covers the protected high or low by 2 pips. It does not go 2 pips beyond PDH out of habit. - **It is a daily-derived level, and daily is HTF.** Anything above 1H is technical analysis only: bias and direction, never entries. The context can come from the day chart. The trigger cannot. - **The 1.7 RR floor and the externals gate still apply.** A textbook sweep of PDL with mixed externals is a no-trade, however good the candle looks. The mistake, and it is the most common one at these levels, is anticipation. Resting a limit order at PDH because *it always reverses there* is not a setup, it is a prediction, and sometimes price simply runs through and never looks back. The system's posture on failed breaks is to recognise them as they happen, with confirmation, and never to anticipate them. PDH and PDL are where that discipline gets tested hardest, precisely because the level is so seductive. Used properly they earn their place at both ends of a trade: as the place a setup can form, once swept and rejected, and as a reference for where price may be reaching. And as with HOD/LOD, where *yesterday* ends depends on your chart's session and timezone setting. Fix it once and never wonder again.