Using Previous Day’s High and Low to Decide Intraday TrendIntroduction and Disclaimer
This article explains how to use the daily chart to understand and plan for short-term or intraday market direction.
To fully understand this, you should already know what directional bias means. If you’re not familiar with it, I highly recommend reading my previous article on the topic before continuing here.
Disclaimer
I'm not a financial advisor.
This article does not offer financial, investment, legal, or any kind of regulated advice.
It's made for educational and entertainment purposes only.
Trading involves risk. You can lose all your money—or even more—if you’re not careful.
You're reading the thoughts of a 22-year-old.
The goal of this article is to show you how to use the previous day’s high and low on a daily chart to:
Get a clear intraday bias (bullish or bearish).
Find entry signals for your trades.
Set clear invalidation points, meaning when a trade idea becomes invalid.
This is part of what’s called multi-timeframe analysis—looking at higher time frames to understand what might happen on lower ones.
Even if you trade short-term (like on 5 or 15-minute charts), it's still helpful to know what the bigger picture (like the daily chart) looks like. Why? Because it shows the main trend, important levels, and key zones that may not appear on lower time frames.
In my opinion, smart trading involves breaking down the price chart from top to bottom—starting with the big picture—then making decisions based on your trading strategy.
The ideas in this article work well for:
Intraday traders who want to capture moves during the day, and
Swing traders who want to catch bigger moves by entering early.
This concept can also be applied to higher time frames, such as the previous week’s high and low.
