Previous Day High and Low
Previous-day highs and lows matter because everyone can see them. That visibility makes them natural liquidity references, breakout tests, and reversal zones. They are not important because they are magical. They are important because traders keep making decisions around them.
That is exactly the kind of level order flow loves. Clear location, clear expectation, clear consequence if the read is right or wrong.
VWAP helps frame the session around a key fair-value reference that traders often use for support, resistance, and mean reversion decisions.
Use VWAP as the reference and order flow as the decision layer so reactions around fair value are easier to judge properly.
The opening range gives traders a quick frame for where early business was accepted and where a later break or rejection becomes meaningful.
Relevant when the topic is about reactions, previous-day levels, low-volume nodes, or trade execution around a clean area.
Why these levels keep getting respected
Prior day extremes hold memory. Traders remember them, mark them, and react to them. Some want the breakout. Some want the fade. Some have stops sitting beyond them. That alone gives the area importance.
Because the level is obvious, the market often shows its hand more clearly there than it does in random mid-range prices. That is a gift if you stay patient enough to wait for it.
How traders use them cleanly
A common use is to wait for the market to test the prior high or low, then read whether the push is being accepted, absorbed, or trapped. That is where CVD and footprint charts can make the decision much cleaner.
If the breakout has real sponsorship, fair enough. If it is all effort and no reward, the reversal side suddenly gets much more interesting.
What newer traders do badly here
They either pre-fade the level with no read or chase the break with no proof. Both are lazy versions of the same mistake, deciding too early.
The better habit is to let the level bring the market into focus, then let the live behaviour tell you which side deserves the trade.