Previous Daily Candle Bias FrameworkXAU/USD Spot - GoldFX:XAUUSDsamstoobadPrevious Daily Candle Bias Framework The previous daily candle provides the market's reference range. Key levels: PDH = Previous Day High PDL = Previous Day Low The daily session close is important because it defines where the market accepted price at the end of the day. The PDH and PDL become the primary liquidity levels for the next session. Step 1: Mark the Previous Day's Levels At the start of the trading day, mark: Previous Day High (PDH) Previous Day Low (PDL) These levels form your daily framework. Step 2: Determine Daily Bias Bearish Bias A bearish bias forms when: Price breaks below the previous day's low. Price also trades below the previous day's close. The market accepts below the close rather than immediately reclaiming it. What Acceptance Looks Like Strong closes below PDC. Retests of PDC that fail. Lower highs forming after the break. Expectation Once the market is accepted below the previous day's close, the expectation is continuation lower. Targets may include: External liquidity below PDL. Session lows. Lower timeframe sell-side liquidity pools. Bullish Bias A bullish bias forms when: Price breaks above the previous day's high. Price remains above the previous day's close. The market shows acceptance above those levels. What Acceptance Looks Like Strong bullish closes. Retests of PDH that hold. Higher highs and higher lows. Expectation Continuation higher toward: Buy-side liquidity. Session highs. Higher timeframe objectives. Step 3: Trading Against a Sweep One of the highest probability setups occurs when price raids one side of the previous day's range before moving toward the opposite side. Bullish Scenario Conditions You have a bullish bias. In this example you will see the top of the daily candle is wickless. A wickless candle is a candlestick that has little to no wick (shadow) on one or both ends, showing strong directional conviction during that candle's formation. This indicates sellers controlled price from the open to the close with very little buying pressure. What Wickless Candles Tell You A wickless candle represents strong displacement and often shows: Aggressive buying or selling. Institutional participation. Market acceptance in one direction. A potential shift in order flow. Many traders view them as evidence that one side of the market is in complete control during that period. Wickless candles often become magnets for price because they represent an area where the market moved so aggressively that very little two way trading occurred. Giving a bullish bias. However, instead of immediately rallying: Price sweeps below PDL. Liquidity is taken from sellers and stop losses. Price quickly closes back inside the previous day's range. Forming a reversal pattern This indicates rejection of lower prices. Confirmation After the sweep Look for: Market Structure Shift (MSS) Change of Character (CHOCH) Fair Value Gap (FVG) Demand Zone Once one of these confirms, look for entries Target Primary target: Previous Day High (PDH) Secondary targets: Buy-side liquidity above PDH. Session highs. Trade Sequence Bullish higher timeframe bias. Sweep below PDL. Candle closes back inside range. Bullish market structure shift. Entry from FVG or demand. Target PDH. Flow: PDL Sweep → Reclaim Range → MSS → FVG/Demand Entry → PDH Bearish Scenario Conditions You have a bearish bias. This example you will see a few daily bearish engulfing candles showing selling pressure. Instead of dropping immediately: Price breaks below above PDL. PDL respected and price holds under This suggests rejection of higher prices. Confirmation Look for: Bearish MSS CHOCH Bearish FVG Supply Zone Target Primary target: Previous Low Secondary targets: Sell-side liquidity below PDL. Session lows. Trade Sequence Bearish higher-timeframe bias. Hold under PDL Bearish MSS. Entry from FVG or supply. Daily Execution Checklist Before London or New York Open □ Mark PDH □ Mark PDL □ Mark PDC □ Identify higher-timeframe trend During Session □ Did price break PDH or PDL? □ Is price accepted above or below PDC? □ Was liquidity swept? □ Did price reclaim the range? □ Has market structure shifted? □ Is there an FVG or supply/demand zone for entry? Targets Bullish: PDH Buy-side liquidity above PDH Bearish: PDL Sell-side liquidity below PDL Summary The framework revolves around using the previous day's range as a map: Break and hold below PDC after taking PDL = bearish continuation bias. Break and hold above PDC after taking PDH = bullish continuation bias. If your bias is bullish but PDL is swept first, wait for a reclaim of the range, a bullish MSS, and enter from an FVG or demand zone targeting PDH. If your bias is bearish but PDH is swept first, wait for a reclaim of the range, a bearish MSS, and enter from an FVG or supply zone targeting PDL. This approach combines liquidity sweeps, daily range analysis, market structure shifts, and FVG entries into a single daily bias model.