Previous Day High/Low

Look at yesterday's candle on a daily chart. The top of the candle body/wick is PDH, the bottom is PDL. Most charting platforms have PDH/PDL indicators that draw these automatically. Mark them on your intraday chart each morning.

Use wicks (the actual high and low including shadows). Wicks represent the true extremes where price was rejected. Some traders use close-to-close for a tighter range, but wick-to-wick is standard.

A gap above PDH is bullish. PDH now acts as support instead of resistance. Look for buying opportunities if price pulls back to test PDH. Don't short at PDH when gap is bullish - trade with the gap.

Intraday trades should be closed by 3:45 PM. For swing trades (expecting move to opposite level), you can hold 1-3 days, but manage with trailing stops. The levels are most relevant for same-day and next-day trading.

A narrow prior day range (small PDR) often precedes a breakout. The levels are still valid but a breakout is more likely than reversal. Be prepared for volatility expansion and consider breakout trading approach.

Look at gap direction: gap up makes PDH more relevant, gap down makes PDL more relevant. Also check for confluence with pivot points or MAs. The level with more confluence and aligned with gap direction is typically stronger.

Yes, both have positive expectancy. Reversals have higher win rate (58-62%), breakouts have better R:R. Adapt to market character: range days favor reversals, trend days favor breakouts. First touch is usually reversal, multiple touches may break.

Statistics show first touch has 62% reversal success, second touch 52%, third touch only 40%. After 2-3 touches without a decisive reversal, be cautious - the level is weakening and breakout probability increases.

Calculate both sets of levels each morning. Where PDH aligns with R1/R2 (within 0.3%), you have strong resistance confluence. Where PDL aligns with S1/S2, strong support confluence. These confluence zones have 68% WR vs 58% standalone.

This is a critical level test from the open. Watch for the first 15-30 minutes to see if price holds or breaks. A hold suggests reversal, a break suggests continuation. Wait for confirmation rather than entering immediately.

For CFDs/futures, track the overnight session (4 PM - 10 AM). Note ONH and ONL. At ASX open, compare: is price above ONH, below ONL, or inside? These additional levels work like PDH/PDL for the overnight session and can be more current.

Layer multiple timeframe H/L: daily PDH/PDL (primary), 2-day H/L, 3-day H/L, weekly H/L. Where these cluster creates strongest zones. Example: if PDH (A$48.00), 2-day high (A$48.05), and weekly high (A$48.10) cluster, it's a major resistance zone.

Watch delta (buy vs sell volume): at PDH, delta should flip from positive to negative for reversal. Watch absorption: large offers getting hit repeatedly without price advance. Watch tape: large sellers stepping in. Order flow confirms or denies price action.

Calculate sector index PDH/PDL (e.g., XMJ for materials). If sector breaks above PDH while individual stock hasn't, expect stock to follow. If stock breaks while sector hasn't, it shows relative strength. Sector context adds conviction to stock trades.

Automate: level calculation at session start, price approach alerts, reversal pattern detection, volume confirmation, position sizing. Keep manual: final entry decision, unusual market conditions, news events. Semi-automation works better than full automation for discretionary elements.