The Previous Day's High (PDH) and Previous Day's Low (PDL) are key price levels in ICT trading, used to identify crucial support and resistance zones in daily trading strategies.
What Are PDH and PDL?
PDH represents the highest price reached on the previous trading day, while PDL indicates the lowest price.
These levels help traders analyze past market movements and identify potential reaction zones.
Price often shows significant reactions at these levels, making them essential for day traders.
How Do PDH and PDL Reflect Market Strength?
The PDH and PDL levels act as market sentiment indicators.
- If the market stays above PDH in early trading hours, it signals strong bullish momentum;
- If the market remains above PDL but fails to break PDH, it suggests weak market conditions.
How to Use PDH and PDL in Trading
Before the market opens, traders should mark PDH and PDL on their charts. These levels can be manually drawn and used throughout the trading session to assess potential trade setups.
An Example of Buy Trading with PDH
In a 5-minute gold chart, if the price reaches the PDH zone, traders can look for bearish reversal patterns near this level. This setup provides an opportunity to open sell positions.
An Example of Sell Trading with PDL
In a 5-minute gold chart, if the price reaches the PDL zone, traders can look for bullish reversal patterns near this level. This setup creates an opportunity to enter buy positions.
Conclusion
The Previous Day’s High (PDH) and Previous Day’s Low (PDL) are essential reference points for day traders.
These levels help traders understand price behavior and market sentiment while acting as key support and resistance levels.
Price reactions around these zones often provide high-probability trade setups.
