Open almost any intraday chart shared online and you will see two lines drawn first: the previous day's high and low. Traders call them the PDH and the PDL. They are popular for a simple reason — everyone can see them, and nobody has to agree on a setting to draw them. When price runs just past one of them and snaps back, you are looking at a liquidity sweep. played out to the end, and understanding it changes how you use them: less as lines to draw and more as appointments to keep an eye on. once they fail.
1. Where the orders are
The previous high is the price at which yesterday's buyers gave up. Short sellers like to place their stops just above it, and breakout traders place their buy orders in the same area. The same happens in reverse below the previous low. So each level hides a cluster of orders waiting to be triggered, and that cluster is what makes price react when it gets there.
2. Three ways a level behaves
A previous extreme can act as a magnet, drawing price toward it during the session. It can act as support or resistance, stopping the move and turning it. Or it can act as a breakout zone: once price clears it decisively, the orders resting there fuel the move further in the same direction. Which of the three you are seeing only becomes clear with the reaction.
3. Breakout or sweep
Not every push beyond the PDH is a breakout. Often price pokes above it, triggers the stops and breakout orders, and closes back inside yesterday's range. That is a sweep: the liquidity above the level was taken, and the move that follows frequently goes the other way. The difference is in the close and in what happens on the next candles — acceptance beyond the level, or a quick return into the range.
4. The week, the month and the year
The same logic scales up. Last week's high and low frame a wider range and usually carry more weight than the daily levels; last month's and last year's are the references of position traders. When a daily level lines up with a weekly one, the confluence adds weight, and the midpoint of the previous range — its 50% — often works as a pivot between the bullish and bearish halves.
5. A simple routine
Before the session, mark yesterday's high and low and last week's. Note whether price opens inside or outside yesterday's range. During the session, treat the edges as the first decision points: watch the close when price reaches one, tell the clean break from the sweep, and give extra attention to any level where two periods meet.
