Previous Day High and Low (PDH/PDL) Strategy: Sweep & Reclaim and Break & Retest

Why PDH and PDL matter

The previous day's high (PDH) and low (PDL) mark where buyers and sellers last gave up. Stop orders and breakout orders cluster just beyond them, so price often reacts violently there. They are objective numbers: anyone can read them from yesterday's completed daily candle, which is why so many traders watch the same levels.

Scenario 1 — Sweep and reclaim (reversal)

1. Price wicks through PDH (or PDL) during the London or New York session.
2. The candle closes back inside yesterday's range. A close beyond the level would be a breakout, not a sweep.
3. Entry: at the reclaim close, or on a retest of the level from inside the range.
4. Stop: just beyond the sweep wick (a fifth of an ATR of buffer).
5. Target: the opposite side of yesterday's range (PDL after a PDH sweep, PDH after a PDL sweep).

Candles to expect before you enter

Scenario 2 — Accepted break and retest (continuation)

1. A strong candle closes beyond PDH (at least 0.3 ATR past it, with a body of 0.6 ATR or more).
2. Wait. Price comes back to test the old high from above.
3. If the retest holds (no close back through), enter just beyond the level.
4. Stop: about 0.8 ATR behind the level. Target: one more prior-day range beyond the level.

Average daily range: how much is left?

The average daily range (ADR) is the typical distance between a day's high and low over the last 14 days. If today has already used 100% or more of ADR, further large moves are less likely and reversal trades gain weight; if only 30–50% is used there is usually room for continuation. Forextity shows this next to every PDH / PDL figure.

Rules that keep it honest

• Yesterday's range should be at least about 2 ATR on your chart, otherwise there is little room to run.
• Prefer the London and New York windows (roughly 07:00–10:00 and 12:00–15:00 UTC).
• Sweep trades are stronger when the daily trend is not against them.
• Skip trades that pay less than 2 times the risk.
• Check the Stress Test: strategies like this win less than half the time, so losing streaks are normal.

Where the numbers come from

The PDH / PDL Board lists the previous-day high, low and close for each market, taken from real daily candles supplied by third-party data providers, together with whether price has swept, broken or is near a level. If the providers cannot be reached, the board says so instead of showing estimated numbers. Day boundaries follow each provider's daily candle, so figures may differ slightly from your broker's.

Related: support and resistance, ICT concepts, position sizing.

Risk notice: educational content, not financial advice. Leveraged trading carries a high risk of loss. Read our Risk Disclaimer.