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Prior day high and low

The previous session's extremes, among the most widely watched intraday reference levels because everyone can see them without drawing anything.

These two prices need no interpretation, which is exactly why they matter. Stop orders cluster just beyond them, breakout orders sit at them, and a large share of intraday ranges either respect them or sweep them.

In practice they behave in two modes. On balanced days price rotates between them; on trend days one is taken out early and never revisited. Which mode you are in is usually clear within the first hour, and the initial-balance is the standard way to judge it.

They are also textbook liquidity-pool-chartings, so a sharp poke through followed by rejection is common enough that entering a breakout the instant the level trades is often the worst available entry.

Related: overnight-high-low, weekly-open, initial-balance, pivot-point

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

Breakout and retestPrice stalls under one level, pushes above it, comes back to touch it from above, then continues higher.pricetimeold resistancenow support1price keeps stalling2breaks above3pulls back and retests it4and carries on
Breakout and retest. Price stalls under the same level several times, pushes above it, then drops back to touch it from above before carrying on. That touch is the retest, where the old ceiling is tried as a floor. A break that falls straight back under it is a false breakout.

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