Previous day and week highs and lows as liquidity targets

Some of the most useful levels on a chart are also the simplest: the high and low of yesterday, and the high and low of last week. ICT traders write them as PDH, PDL, PWH and PWL. This guide explains why these levels matter and how to work with them.

What the four levels are

PDH: previous day high.
PDL: previous day low.
PWH: previous week high.
PWL: previous week low.

In the ICC Charts terminal they come from the Key Levels layer, which also shows the midnight open and the true opens. The engine takes the day's high and low from the previous trading day, and the week's high and low from the previous week.

Why they act as liquidity

Think about where people place their stops. A trader who is short often puts the stop just above a recent high. A trader who is long puts it just below a recent low. Breakout traders place entry orders beyond the same levels. So above a clear high sits buy-side liquidity, and below a clear low sits sell-side liquidity.

Yesterday's range and last week's range are levels almost everyone can see. That makes them natural pools of resting orders, similar to equal highs and equal lows.

Targets and sweeps

Traders use these levels in two ways:

As a target. If your bias is bullish, the previous day high is a logical place to take profit or to expect price to run toward. The engine does the same in its bias logic: with a bullish bias it looks for the nearest pool ahead, and PDH is one of the candidates. With a bearish bias, PDL is the candidate.
As a sweep. Price pushes through the level, takes the stops, then reverses. This is the pattern behind a Judas swing or turtle soup.

The same level can be both. Price may be drawn up to PDH (target) and then reverse after taking it (sweep). Which one it is can only be judged after the fact, so wait for confirmation instead of guessing.

A worked example

These numbers are only an illustration. Yesterday's high was 2,045.0 and the low was 2,030.0. It is now the London session and price is at 2,036.0.

Your daily bias is bullish (see daily bias).
The nearest obvious pool above is PDH at 2,045.0. That is your draw on liquidity.
Price dips toward a fair value gap, reacts, and you plan the trade with a stop below the gap.
You set the first target just under 2,045.0, because many orders sit there and price may reverse on contact.

If price instead spikes through 2,045.0 and closes back below it quickly, that is a possible sweep and your bullish idea needs a second look.

Daily levels vs weekly levels

Daily levels change every day, so they suit intraday traders who work in sessions.
Weekly levels are fewer and carry more weight, since a whole week of orders sits behind them.
When a daily level and a weekly level are close together, the area is often more interesting than either alone.

Tips that keep you honest

Use a time filter. Many traders only act inside a killzone.
Check the nearest level first. If PDL is just below price, a bullish plan has little room on the downside, and a bearish plan faces a close target.
Read the story. Did price already sweep one side today? A sweep of PDL followed by a shift in structure is a different picture than an untouched range.
Do not trade the line itself. It is an area. Wait for a reaction.

Common mistakes

Drawing levels from the wrong day because of the chart's time zone. The terminal draws them for you, which avoids this.
Treating every touch as a reversal. Levels often break, especially in a strong trend.
Marking too many lines. Keep PDH, PDL, PWH and PWL, and add more only when they help your rule.

Practise it

Open the terminal, turn on the Key Levels layer and scroll back day by day. For each day, note whether price took PDH or PDL first and what it did next. After 20 days you will have your own record, which is worth more than any rule of thumb. The models page shows how the engine builds trade ideas from levels like these.

Education only. ICC Charts is not affiliated with Inner Circle Trader (Michael J. Huddleston); these ideas are explained in our own words. Levels are areas of interest, not guarantees. Trading involves risk; practise on a demo account first.

Try it on a live chart

Open ICC Charts in your browser, free, with the ICT and VSA layers and the model scanner. Or practise on past charts in the free Chart Challenge game.

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