Yesterday's High and Low

Yesterday's high and low are my reference points for developing my thesis each day.

Markets only do three things:

1. 01Break out, pull back, and TREND (continuation).
2. 02Break out, stall, and reverse. (FALSE BREAK REVERSAL)
3. 03Trade back and forth between a high and low level and remain in range. (TRADING RANGE)

The basis for identifying what market conditions are evolving comes from understanding this. The type of Best Trade Setup that can present itself in any session comes from understanding whether there's been a false break, a breakout, or simply a range market — not only in the day, but over the course of two to three days as well.

There are session BTS in the day, and larger Three Day Setups over the course of the week.

I obtain this market-generated information using yesterday's high and low as reference levels, to identify one of these three, and also to measure potential "strike zone" levels within the day itself for trade execution of certain BTS.

The weekly and monthly highs and lows are also significant levels. When daily, weekly or monthly levels are broken, this has a multitude of effects.