HOW-TO: Use Key Levels From The Dobrusky Price Action Engine
This post breaks down how I think about level hierarchy inside the Price Action Engine.
The main idea is simple: not all levels matter equally.
Higher-timeframe levels usually matter more for context, thesis, and larger targets. Lower-timeframe levels are usually more useful for precise intraday execution.
The mistake is treating every plotted line the same. A monthly level, weekly level, previous day high, daily gap, pivot, and close should not all be interpreted with the same weight.
Main concept: higher timeframe for context, lower timeframe for execution
In general, I separate levels into two broad categories:
A higher-timeframe level can be very important, but that does not automatically make it a good entry level.
The reason is precision.
On an intraday chart, price may overshoot or undershoot a major higher-timeframe level before reacting. That can make it harder to define a clean entry, stop, and risk-to-reward.
Lower-timeframe levels are usually more actionable because price often interacts with them more precisely.
That does not make them more important overall. It just makes them more practical for execution.
Why hierarchy matters
Level hierarchy helps answer a few practical questions:
Without hierarchy, the chart becomes a mess of equal-looking lines.
That creates a problem because every level starts to look important.
A useful chart should make it clear which levels are for context, which levels are for execution, and which levels are only secondary references.
How the levels are visually separated
The level styling is meant to make the hierarchy easier to read at a glance.
The styling does not mean a level is automatically tradable.
It is only a visual shortcut for how I personally rank the levels.
In simple terms:
Yearly and quarterly pivots
Yearly and quarterly pivots are mostly higher-timeframe context levels.
I do not normally use them for intraday trading.
They can be useful for understanding the larger market structure, especially on weekly or higher-timeframe charts. They can also become useful when price is near all-time highs and there are no obvious nearby targets above.
That is the main exception.
If price is pushing into an area with no clear overhead structure, a nearby yearly or quarterly pivot can become a reasonable target reference.
But most of the time, I do not want those levels crowding my intraday chart.
A practical rule:
Monthly levels
Monthly levels are some of the most important levels on the chart from a big-picture standpoint.
They can help with:
But I do not personally enter directly off monthly levels.
They are important, but they are not usually precise enough for the way I structure intraday trades.
A monthly high, monthly low, or current month open can matter a lot. Price may react around it, reject it, accept beyond it, or use it as a magnet.
But for actual entries, I would rather use a more actionable level nearby, such as a weekly level, daily level, gap end, or volume level.
Monthly levels are major context.
They are not my preferred execution levels.
Weekly levels
Weekly levels are a middle ground between higher-timeframe context and intraday actionability.
They still carry meaningful weight, but they are usually more practical for entries than monthly levels.
Examples include:
These levels can be useful because they are meaningful higher-timeframe reference points, but they are often close enough to current price to matter intraday.
This is why I treat weekly levels as more actionable than monthly levels.
Weekly levels can be used for:
A weekly level is not automatically tradable, but it is often one of the first areas I care about when building an intraday plan.
Daily levels
Daily levels are where the chart becomes more actionable for intraday trading.
These are some of the levels I most often use for actual trade entries.
Examples include:
Daily levels are useful because they are close enough to current intraday price action to create clearer trade structure.
They can help define:
The key is still context.
A signal near a daily level is more useful when it aligns with the broader thesis, market structure, and risk-to-reward.
Daily gaps
Daily gaps are more nuanced because I do not treat the gap start and gap end the same way.
In my process:
This is why the two sides are visually separated.
The gap end is shown as a solid level because I treat it as the more actionable side.
The gap start is shown as a dashed level because I usually treat it more as a target or context area.
A daily gap level should not be treated as guaranteed support or resistance.
It is simply a reference point that can matter when price returns to that area.
Daily volume levels
Daily volume levels are also part of my hierarchy.
I use them for both entries and targets, but I still compare them against the broader level structure.
For example, if there is a daily volume level nearby, but a previous week high is not much farther beyond it, the previous week high may be the more important overall target.
That is the point of hierarchy.
A closer level is not always the better final target.
Sometimes it is only the first target or trim area. A more important level slightly farther away may be the better, larger reference point.
Pivots and closes
Monthly pivots, weekly pivots, daily pivots, and previous closes can all be useful, but I usually treat them as secondary.
I do not normally enter directly off pivot levels or close levels.
I am more likely to use them as targets when there are no stronger nearby levels.
This includes situations where:
Pivots are useful when needed, but I usually do not keep every pivot visible because they can add too much clutter.
The same applies to closes.
Previous closes can matter, but I generally prioritize highs, lows, opens, gaps, and more obvious structural levels first.
A practical rule:
My practical level hierarchy
This is the simplified way I think about the hierarchy:
This is not about memorizing a perfect ranking.
It is about knowing what role each level plays.
Some levels are for context.
Some levels are for entries.
Some levels are for targets.
Some levels are only worth showing when the price is actually near them.
How I use this in practice
My general process is:
I am usually looking to trade toward the nearest meaningful level.
In some cases, I may trim at the nearest meaningful level and try to hold part of the trade for a larger higher-timeframe target.
But the first target still matters.
I do not want to enter a trade without knowing where the nearest meaningful level is.
That target helps determine whether the trade is even worth taking.
Example framework
A simple short setup might look like this:
For the entry itself, I may use a basic retracement such as the 50% or 61.8% area of the signal move.
There is nothing complicated about that.
The point is not to chase the signal.
The point is to enter at a location where the stop, target, and risk-to-reward make sense.
If the nearest meaningful level is too close and the trade does not offer enough room, then the setup may not be worth taking.
Targets and trims
Targets should come from meaningful levels, not random reward multiples by themselves.
Risk-to-reward matters, but the target still needs to make sense on the chart.
A practical target process is:
A nearby level can be a full exit or a trim area.
That depends on the setup, the strength of the thesis, and how much room exists beyond the first target.
The key point is that I do not want to trade without a target.
What this is not
Level hierarchy is not a prediction system.
A higher-ranked level is not guaranteed to hold.
A lower-ranked level is not automatically irrelevant.
A signal at a level is not automatically a trade.
The hierarchy is only a way to organize information so the chart is easier to read and decisions are more consistent.
The trader still has to judge context, entry location, stop placement, target quality, and whether the setup fits the plan.
Risk and limitations
All levels can fail.
Price can overshoot a level, break through it, reverse before reaching it, or ignore it completely.
Higher-timeframe levels may matter more overall, but they are not always precise enough for intraday entries.
Lower-timeframe levels may be more actionable, but they usually carry less weight.
That trade-off is the entire reason hierarchy matters.
The goal is not to find perfect levels.
The goal is to know which levels are most relevant for context, which ones are most useful for execution, and which ones should probably stay off the chart unless price is near them.
Closing
A clean level hierarchy keeps the chart usable.
Higher-timeframe levels help define context and larger targets.
Lower-timeframe levels help define entries, stops, and more immediate targets.
Pivots and closes can be useful when there are no better nearby levels, but they do not need to clutter the chart all the time.
Once the key levels are organized, the next step is understanding signal hierarchy: which signal types matter most, which ones need more confirmation, and how signals should be interpreted around these levels.
This post breaks down how I think about level hierarchy inside the Price Action Engine.
The main idea is simple: not all levels matter equally.
Higher-timeframe levels usually matter more for context, thesis, and larger targets. Lower-timeframe levels are usually more useful for precise intraday execution.
The mistake is treating every plotted line the same. A monthly level, weekly level, previous day high, daily gap, pivot, and close should not all be interpreted with the same weight.
Main concept: higher timeframe for context, lower timeframe for execution
In general, I separate levels into two broad categories:
- Higher-timeframe levels: better for market context, daily thesis, and larger targets.
- Lower-timeframe levels: better for precise entries, stops, and intraday trade location.
A higher-timeframe level can be very important, but that does not automatically make it a good entry level.
The reason is precision.
On an intraday chart, price may overshoot or undershoot a major higher-timeframe level before reacting. That can make it harder to define a clean entry, stop, and risk-to-reward.
Lower-timeframe levels are usually more actionable because price often interacts with them more precisely.
That does not make them more important overall. It just makes them more practical for execution.
Why hierarchy matters
Level hierarchy helps answer a few practical questions:
- Which levels matter most for the bigger picture?
- Which levels are realistic targets?
- Which levels are precise enough for entries?
- Which levels should stay visible, and which ones are just adding clutter?
Without hierarchy, the chart becomes a mess of equal-looking lines.
That creates a problem because every level starts to look important.
A useful chart should make it clear which levels are for context, which levels are for execution, and which levels are only secondary references.
How the levels are visually separated
The level styling is meant to make the hierarchy easier to read at a glance.
- Monthly levels are larger dashed lines because I use them mainly for context, thesis, and larger targets, not direct intraday entries.
- Weekly levels are solid and slightly wider than daily levels because they are important higher-timeframe reference points, but still actionable enough for intraday setups.
- Daily levels are solid because they are some of the most actionable intraday reference points.
- Daily gap ends are solid because I treat them as more actionable for entries.
- Daily gap starts are dashed because I usually treat them more as targets or context.
- Open levels are orange so current day, week, and month opens are easy to identify.
- Close levels are dotted and yellow because I treat closes as secondary reference levels, not primary entry levels.
- Pivot levels are dotted. Their colors vary, and their width corresponds to the timeframe or strength of the pivot.
The styling does not mean a level is automatically tradable.
It is only a visual shortcut for how I personally rank the levels.
In simple terms:
- Solid levels are generally more actionable.
- Dashed levels are usually more for context or targets.
- Dotted levels are usually secondary references.
- Wider levels generally represent more important higher-timeframe levels.
Yearly and quarterly pivots
Yearly and quarterly pivots are mostly higher-timeframe context levels.
I do not normally use them for intraday trading.
They can be useful for understanding the larger market structure, especially on weekly or higher-timeframe charts. They can also become useful when price is near all-time highs and there are no obvious nearby targets above.
That is the main exception.
If price is pushing into an area with no clear overhead structure, a nearby yearly or quarterly pivot can become a reasonable target reference.
But most of the time, I do not want those levels crowding my intraday chart.
A practical rule:
- Use yearly and quarterly pivots for broad context.
- Do not use them as normal intraday entry levels.
- Consider them as targets only when there are no better nearby levels.
- Keep them hidden when they are not relevant to the current price.
Monthly levels
Monthly levels are some of the most important levels on the chart from a big-picture standpoint.
They can help with:
- Overall market context
- Daily thesis
- Larger targets
- Understanding where price is relative to major structure
But I do not personally enter directly off monthly levels.
They are important, but they are not usually precise enough for the way I structure intraday trades.
A monthly high, monthly low, or current month open can matter a lot. Price may react around it, reject it, accept beyond it, or use it as a magnet.
But for actual entries, I would rather use a more actionable level nearby, such as a weekly level, daily level, gap end, or volume level.
Monthly levels are major context.
They are not my preferred execution levels.
Weekly levels
Weekly levels are a middle ground between higher-timeframe context and intraday actionability.
They still carry meaningful weight, but they are usually more practical for entries than monthly levels.
Examples include:
- Previous week high
- Previous week low
- Current week open
These levels can be useful because they are meaningful higher-timeframe reference points, but they are often close enough to current price to matter intraday.
This is why I treat weekly levels as more actionable than monthly levels.
Weekly levels can be used for:
- Trade location
- Daily thesis context
- Targets
- Reversal areas
- Breakout or failed breakout context
A weekly level is not automatically tradable, but it is often one of the first areas I care about when building an intraday plan.
Daily levels
Daily levels are where the chart becomes more actionable for intraday trading.
These are some of the levels I most often use for actual trade entries.
Examples include:
- Previous day high
- Previous day low
- Current day open
- Previous day close, depending on context
- Daily gap levels
Daily levels are useful because they are close enough to current intraday price action to create clearer trade structure.
They can help define:
- Where a signal is occurring
- Where a stop may need to go
- Where the nearest meaningful target is
- Whether price is accepting above or below an important intraday reference point
The key is still context.
A signal near a daily level is more useful when it aligns with the broader thesis, market structure, and risk-to-reward.
Daily gaps
Daily gaps are more nuanced because I do not treat the gap start and gap end the same way.
In my process:
- The daily gap end is more actionable for entries.
- The daily gap start is more useful for targets or context.
This is why the two sides are visually separated.
The gap end is shown as a solid level because I treat it as the more actionable side.
The gap start is shown as a dashed level because I usually treat it more as a target or context area.
A daily gap level should not be treated as guaranteed support or resistance.
It is simply a reference point that can matter when price returns to that area.
Daily volume levels
Daily volume levels are also part of my hierarchy.
I use them for both entries and targets, but I still compare them against the broader level structure.
For example, if there is a daily volume level nearby, but a previous week high is not much farther beyond it, the previous week high may be the more important overall target.
That is the point of hierarchy.
A closer level is not always the better final target.
Sometimes it is only the first target or trim area. A more important level slightly farther away may be the better, larger reference point.
Pivots and closes
Monthly pivots, weekly pivots, daily pivots, and previous closes can all be useful, but I usually treat them as secondary.
I do not normally enter directly off pivot levels or close levels.
I am more likely to use them as targets when there are no stronger nearby levels.
This includes situations where:
- Price is near all-time highs.
- There are no obvious prior highs or lows nearby.
- There are no clean gap levels nearby.
- The chart lacks better structure.
Pivots are useful when needed, but I usually do not keep every pivot visible because they can add too much clutter.
The same applies to closes.
Previous closes can matter, but I generally prioritize highs, lows, opens, gaps, and more obvious structural levels first.
A practical rule:
- Use pivots and closes as secondary references.
- Do not treat them as primary entry levels.
- Turn them on when the chart lacks better nearby targets.
- Keep them off when they make the chart harder to read.
My practical level hierarchy
This is the simplified way I think about the hierarchy:
- Yearly and quarterly pivots: broad context, rarely used intraday.
- Monthly levels: important context and larger targets, not direct entries for me.
- Weekly levels: important middle-ground levels, useful for context, targets, and possible entries.
- Daily levels: highly actionable for intraday entries and targets.
- Daily gap ends: more actionable for entries.
- Daily gap starts: more useful for targets and context.
- Daily volume levels: useful for entries and targets, but still ranked against nearby higher-priority levels.
- Pivots and closes: secondary targets when no better levels are nearby.
This is not about memorizing a perfect ranking.
It is about knowing what role each level plays.
Some levels are for context.
Some levels are for entries.
Some levels are for targets.
Some levels are only worth showing when the price is actually near them.
How I use this in practice
My general process is:
- Start with the higher-timeframe context.
- Identify the major levels that could influence the day.
- Drop down to the intraday chart.
- Focus on the levels that are close enough to be actionable.
- Wait for price action or a signal near a meaningful level.
- Make sure the trade has a logical target and acceptable risk-to-reward.
I am usually looking to trade toward the nearest meaningful level.
In some cases, I may trim at the nearest meaningful level and try to hold part of the trade for a larger higher-timeframe target.
But the first target still matters.
I do not want to enter a trade without knowing where the nearest meaningful level is.
That target helps determine whether the trade is even worth taking.
Example framework
A simple short setup might look like this:
- Price is below an important weekly level.
- The daily thesis supports looking for shorts.
- Price pulls back into a meaningful level.
- A valid signal forms near that level.
- The entry is placed where the risk-to-reward makes sense.
- The stop goes beyond the swing and beyond the level.
- The first target is the nearest meaningful level below.
For the entry itself, I may use a basic retracement such as the 50% or 61.8% area of the signal move.
There is nothing complicated about that.
The point is not to chase the signal.
The point is to enter at a location where the stop, target, and risk-to-reward make sense.
If the nearest meaningful level is too close and the trade does not offer enough room, then the setup may not be worth taking.
Targets and trims
Targets should come from meaningful levels, not random reward multiples by themselves.
Risk-to-reward matters, but the target still needs to make sense on the chart.
A practical target process is:
- Find the nearest meaningful level in the trade direction.
- Check whether the trade offers acceptable risk-to-reward to that level.
- If there is a larger level beyond it, consider trimming at the first level and holding part for the larger target.
- If there is no clean target, skip the trade or reduce expectations.
A nearby level can be a full exit or a trim area.
That depends on the setup, the strength of the thesis, and how much room exists beyond the first target.
The key point is that I do not want to trade without a target.
What this is not
Level hierarchy is not a prediction system.
A higher-ranked level is not guaranteed to hold.
A lower-ranked level is not automatically irrelevant.
A signal at a level is not automatically a trade.
The hierarchy is only a way to organize information so the chart is easier to read and decisions are more consistent.
The trader still has to judge context, entry location, stop placement, target quality, and whether the setup fits the plan.
Risk and limitations
All levels can fail.
Price can overshoot a level, break through it, reverse before reaching it, or ignore it completely.
Higher-timeframe levels may matter more overall, but they are not always precise enough for intraday entries.
Lower-timeframe levels may be more actionable, but they usually carry less weight.
That trade-off is the entire reason hierarchy matters.
The goal is not to find perfect levels.
The goal is to know which levels are most relevant for context, which ones are most useful for execution, and which ones should probably stay off the chart unless price is near them.
Closing
A clean level hierarchy keeps the chart usable.
Higher-timeframe levels help define context and larger targets.
Lower-timeframe levels help define entries, stops, and more immediate targets.
Pivots and closes can be useful when there are no better nearby levels, but they do not need to clutter the chart all the time.
Once the key levels are organized, the next step is understanding signal hierarchy: which signal types matter most, which ones need more confirmation, and how signals should be interpreted around these levels.
Software developer & trader | 6+ years in markets | 3+ years intraday | dobruskytrading.com
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Thông tin và các ấn phẩm này không nhằm mục đích, và không cấu thành, lời khuyên hoặc khuyến nghị về tài chính, đầu tư, giao dịch hay các loại khác do TradingView cung cấp hoặc xác nhận. Đọc thêm tại Điều khoản Sử dụng.
Software developer & trader | 6+ years in markets | 3+ years intraday | dobruskytrading.com
Bài đăng liên quan
Thông báo miễn trừ trách nhiệm
Thông tin và các ấn phẩm này không nhằm mục đích, và không cấu thành, lời khuyên hoặc khuyến nghị về tài chính, đầu tư, giao dịch hay các loại khác do TradingView cung cấp hoặc xác nhận. Đọc thêm tại Điều khoản Sử dụng.