Strategies School / ICT / Smart Money Concepts

Daily Bias and the Draw on Liquidity

Intermediate ยท 8 min read

Decide whether to look for buys or sells today using the previous day high and low and higher timeframe structure.

What it is

Bias is your expectation for direction. A simple method uses the previous day high (PDH) and low (PDL). Price tends to be drawn toward untapped liquidity beyond them.

If the higher timeframe trend is up and price just swept the PDL and rejected, the bias favours a move toward the PDH. This is a hypothesis, not a promise.

Bias tells you which side to trade. Entries still need structure confirmation on a lower timeframe.

How to spot it

  1. Mark PDH, PDL and the weekly open.
  2. Check the daily and 4H structure: is it making higher highs or lower lows?
  3. Watch which side of the previous day range gets swept first.
  4. Take only trades that agree with your bias.

Trade plan

  • Entry: On a lower timeframe reaction after the sweep, in the bias direction.
  • Stop loss: Beyond the sweep extreme.
  • Target: The opposite side of the previous day range (the draw on liquidity).

Common mistakes

  • Wrong: Trading both directions with no bias. Right: Pick a side and only take setups in that direction.
  • Wrong: Ignoring the higher timeframe. Right: Check daily and 4H before anything else.

Pro tip: Write your bias before the session opens. It stops you from flipping your opinion after a few random candles.

Quiz

  • PDH stands for: Answer: Previous day high. PDH is the previous day high.
  • A bullish bias means you: Answer: Look for buys and avoid fighting the bias. You take trades that agree with your bias.
  • When should you decide your bias? Answer: Before the session starts. Write it before the session.

Educational content, not financial advice. Diagrams are illustrations, not real market data.