Previous Day High and Low: The Levels I Mark Every Morning

For years I showed up to the open with a naked chart and an opinion. No key levels. No context. Just vibes.

Then I'd get run over by a level I couldn't see, check it after, and realize it was staring me in the face the whole time.

The day I started marking the previous day high and low before the bell, my mornings changed. These two lines are the most honest levels on my chart. Price respects them because everyone is watching them, and everyone is watching them because price respects them.

Why price remembers these two lines

Every night, millions of stops go to sleep around the previous day high (PDH) and previous day low (PDL).

A trader who went long yesterday and held overnight puts their stop loss under the day low. A trader who shorted puts theirs above the day high. Every breakout trader marks yesterday's range. Every algorithm does too. That means real liquidity pools up overnight, sitting right at those two lines, and smart money does not leave free liquidity on the table.

When I say price "remembers" these levels, I mean the market keeps coming back to them because the orders are still there. The PDH and PDL are where the stops live. They are the bait the market comes back to collect.

How I mark them every premarket

Keep this dead simple. Complexity is where your money goes to die. This is the first thing I do in my premarket routine, before news, before anything else.

Previous day high (PDH): the highest print of yesterday's regular session. One line. Draw it across the whole chart.

Previous day low (PDL): the lowest print of yesterday's regular session. Same treatment.

Overnight high and low: the futures range since yesterday's close. This tells you what the world did while you slept.

That is four lines. I do not draw ten.

One rule I live by: these levels are zones, not laser lines. Give them a few cents of room. Wick through and snap back means the level is doing its job. A full 15-minute candle body closing well beyond it means the level broke and I move on. No mourning.

Why sweeps of these levels become PSS setups

Here is where it gets good.

Everyone and their cousin has their stops parked just beyond PDH and PDL. So what happens first thing in the morning? Price pushes toward one of those lines, everyone sees the "breakout" or "breakdown" coming, and then the market sweeps the line, collects the stops, and reverses.

That sweep is the first step of my PSS Model. I wrote the full breakdown of what Liquidity Sweeps actually are if you need the foundation. The short version: a Liquidity Sweep pierces a clear level, grabs the stops resting there, and snaps back. The stops are the fuel. The reversal is the engine.

PDH and PDL sweeps are prime because the liquidity there is the deepest. More stops means more fuel, and more fuel means cleaner reversals. I would rather trade one clean PDH sweep than five random ones off some level nobody else is watching.

Say $SPY pushes down through the previous day low on a panicky morning. Stops detonate. Retail shorts pile in. Then a wick forms, price snaps back above PDL, and the reversal begins. That is the market doing exactly what it always does at the levels everyone watches.

My rules for trading these levels

Drawing the lines is the easy part. Trading them without getting chopped takes discipline, so here are my rules:

First touch is for watching, not trading. When price first arrives at PDH or PDL, I watch the reaction. I need to see whether it respects the level or sweeps it before I have any edge.

I trade the sweep, never the first poke. If price wicks through the level and closes back inside the range, that is a Liquidity Sweep. Now I am interested. No wick rejection, no trade.

I need the Directional Shift before entry. A sweep alone is not a setup. I wait for a strong candle body close back through the swept level before I even think about a trade.

One level, one direction, one plan. If $SPY sweeps PDL in the morning, I am looking for a long setup off the reversal. I am not also shorting the rip back up toward PDH five minutes later. Pick your read, trade your plan.

Trade these levels live with me. Every morning I mark PDH and PDL in premarket and call the sweeps in real time inside the free Bulls Corner Discord. Drop your email and you are inside.

Start every morning with four lines

That is four lines on a clean chart.

These levels work because they are honest. They are where yesterday's battle ended and where today's stops are parked. Price will visit them. The question is whether you will have a plan when it does.

If you want to watch me mark these levels live: the free Discord is where it happens, join free. For the full setup breakdown: the 7-day free trial gets you inside Premium free for a week.

See you at the next sweep.

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Free download: Want this model as a one-page PDF cheat sheet? Grab the Upside PSS Model guide free here.

FAQ

What is the previous day high low trading strategy?

The previous day high low trading strategy uses yesterday's session high and low as key levels for the current day. Traders mark PDH and PDL in premarket, watch for reactions or Liquidity Sweeps, and plan entries off the sweeps, since stops and breakout orders cluster there.

How do I mark the previous day high and low?

Draw one line at the highest print of yesterday's regular session (PDH) and one at the lowest print (PDL), plus the overnight high and low. Four lines total. Treat them as zones, not laser lines.

Why do sweeps of PDH and PDL happen so often?

Because overnight stop orders cluster just beyond those lines. Smart money pushes price into those pools to collect the stops, then reverses.

Should I use PDH and PDL on every timeframe?

I mark them on the daily and 4H and trade off them intraday on the 1m to 15m. They matter most on the open and during the morning drive. Later in the day their pull fades.

What is the difference between PDH/PDL and overnight high/low?

PDH and PDL come from yesterday's regular session. Overnight high and low come from the futures session between yesterday's close and this morning's open. I mark all four.

Risk note: everything on this blog is educational content from my own trading experience, not financial advice. Trading options involves substantial risk of loss.