Yesterday's high or low breaks today, and every trader who's been watching it since the open finally has to react.
“Wait for the close, not the touch. A thin, low-volume poke through yesterday's level with nothing behind it is how you become the target of someone else's stop hunt.”Jason Parker · Founder
Every trader with a chart drawn on it is watching yesterday's high and low. It's the one level that doesn't need an indicator to find, doesn't shift overnight, and picks up more attention the longer price sits near it without breaking. When it finally goes, the stop orders resting on the other side of it go with it.
| Entry | First close beyond yesterday's high or low, or the first retest of that level once it's broken |
| Exit | A measured move equal to the distance from the day's open to the level, or trail once price clears the next reference point |
| Stop | Back on the other side of yesterday's level, past the wick that made the break |
An illustrative example built to show the setup’s shape. Not historical price data, and not tied to any specific ticker.
A thin, low-volume poke through the level with nothing behind it. Price can tag yesterday's high a dozen times in a session without ever closing past it, and buying every failed poke as a breakout is how you become the money someone else's stop hunt was aimed at. Wait for the close, not the touch.
None of this works without the framework underneath it. Read risk management next, or run your own numbers in the position-size calculator.
Common questions about trading this setup, answered straight.
Entry comes on the first close beyond yesterday's high or low, or on the first retest of that level once it's broken.
The stop sits back on the other side of yesterday's level, past the wick that made the break. The target is a measured move equal to the distance from the day's open to the level, or a trail once price clears the next reference point.
A thin, low-volume poke through the level with nothing behind it. Price can tag yesterday's high or low repeatedly without ever closing past it, so buying every failed poke as a breakout means becoming the target of someone else's stop hunt.
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