The Previous Session High (PSH) and Previous Session Low (PSL) are critical levels used in ICT style (Inner Circle Trader) and Smart Money Concepts (SMC) to identify key support and resistance zones in trading.
These levels help traders predict market movements and structure their trades accordingly.
What Are PSH and PSL?
The Previous Session High (PSH) refers to the highest price recorded during the last trading session, while the Previous Session Low (PSL) represents the lowest price from the same session.
These levels act as resistance and support, helping traders anticipate price reactions and determine potential breakouts or reversals in the market.
How to Trade Using the Previous Session High (PSH)?
There are three effective ways to utilize PSH in trading:
Resistance Level
If the price approaches the Previous Session High (PSH) but fails to break above it, this level acts as a resistance.
It may form structures like aFair Value Gap (FVG) or an Order Block (OB). In this case, traders can enter sell positions.
Breakout Strategy
If the price breaks above PSH in the current session, it signals bullish continuation and can act as a support level or a breaker block. Traders can use this breakout to enter buy orders.
Trend Confirmation
A successful PSH breakout is often an indicator of market strength, confirming a bullish trend. Traders can use this confirmation alongside other bullish signals for trade validation.
How to Use the Previous Session Low (PSL)?
There are three main ways to apply PSL in trading:
Support Level
If the price approaches the Previous Session Low (PSL) but fails to break below it, this level acts as a support. Traders can look for buy opportunities in this scenario.
Breakdown Strategy
If the price breaks below PSL, it signals bearish continuation and the level may turn into resistance. Traders can use this breakdown to enter sell positions.
Trend Confirmation
A PSL breakout often indicates market weakness and confirms a bearish trend. Traders can use this as confirmation for bearish trade setups.
Conclusion
The Previous Session High (PSH) and Previous Session Low (PSL) serve as key support and resistance levels that help traders anticipate price movements.
These levels allow traders to analyze market behavior, identify entry and exit points, and determine trend direction.
A price reaction at these levels can signal trend continuation or potential reversal, making them valuable tools in ICT and SMC trading strategies.
