What is a high low strategy?
Asked by: Ms. Onie Smitham DDS | Last update: October 1, 2025Score: 4.5/5 (23 votes)
High–low pricing (or hi–low pricing) is a type of pricing strategy adopted by companies, usually small and medium-sized retail firms, where a firm initially charges a high price for a product and later, when it has become less desirable, sells it at a discount or through clearance sales.
What is an example of a high low pricing strategy?
Retail giants such as Macy's and Kohl's are notable examples of companies that use high low pricing strategies. These companies initially offer products at higher price points (reference price) and then provide significant discounts during sales events (using their optimal price points).
What is an example of an open high low strategy?
Example 1: Open = High
Suppose the stock of Reliance Industries Ltd opens at ₹3,000, and this is also the highest price of the day. Now, as per the OHOL strategy, the stock may fall throughout the day. So, you could sell or short-sell the stock to make profits.
What is a higher high lower low strategy?
Using higher highs (HH) and lower lows (LL) is a powerful tool in developing trading strategies. These patterns help identify optimal entry and exit points and improve risk management. For example, identifying a higher low allows you to properly set a stop loss, helping to minimize potential losses.
What makes a high low pricing strategy appealing?
What makes a high-low pricing strategy appealing to sellers? Sellers love high-low pricing because, done right, it maximizes profits from early adopters and emphasizes that the product is high-quality, while still appealing to a broad audience and drives a high volume of sales overall.
Strong High, Weak High, Strong Low and Weak Low | Market Structure Trading
What are three advantages of a high low pricing strategy?
Generate excitement, drive traffic to the store, and stimulate the sale of other products.
What is the potential problem with a high low pricing strategy?
If a business constantly uses the high–low strategy to offer frequent discounts on certain products, it can alter customers' perceptions. A customer may perceive the discounted items as low-quality products. A customer who perceives a particular set of products as low quality may see the business brand as low quality.
How to identify hh and hl?
Based on Dow Theory, a series of successive higher highs (HH) and higher lows (HL) is the sign of an uptrend (bull trend) and a series of successive lower highs (LH) and lower lows (LL) is the sign of a downtrend (bear trend). So this script indicates the trends using the concept and draws corresponding trend lines.
Are higher lows bullish?
Yes, lower highs and higher lows can be considered bullish, as they typically indicate a consolidation phase before a potential trend reversal to the upside. This pattern represents a decrease in selling pressure and an overall increase in buying pressure, causing the price to form a converging range.
What is a high level strategy?
The corporate strategy is the highest-level strategy in an organization. It defines the organization's overall direction and the high-level ideas of how to move towards it. These plans are usually created by leadership, such as the CEO and top management.
What is the 3 day high low strategy?
The Larry Connors 3 Day High/Low Strategy is a short-term mean-reversion trading strategy that is designed to identify potential buying opportunities when a security is oversold. This strategy is based on the principles developed by Larry Connors, a well-known trading system developer and author.
Is open high low strategy accurate?
The accuracy of the Open High Low (OHL) strategy can vary depending on market conditions and the specific security being traded. While it can be a useful tool for identifying potential trading opportunities, it's important to use it in conjunction with other technical analysis techniques and risk management strategies.
What is an example of a high price strategy?
Price skimming
Price skimming is a strategy in which a company initially charges a high price for its products or services when it first enters the market. Doing so can signal superior quality while creating an exclusive experience for early customers willing to pay a premium.
What companies use high low pricing strategy?
There are many big firms using this type of pricing strategy (including, in North America, Reebok, Nike, and Target). Competition in shoemaking and the fashion industry is partly through high–low pricing (for example Macy's, Nordstrom).
What is Walmart everyday low price?
In everyday low pricing strategy, products are priced lower than those of other brands or retailers. These prices would remain low over a long period compared to reduced prices offered during deals or discounts. Walmart commands a huge share of the CPG retail channel in the US.
What pricing strategies does H&M use?
Overwhelming Emphasis on Regular Pricing: A significant majority (98.35%) of H&M's products are sold at regular prices, indicating confidence in the perceived value and appeal of their offerings. This strategy underscores H&M's ability to maintain consumer interest without frequent discounts.
How to identify higher low?
Higher lows, where each low is higher than the preceding one, point to diminishing selling pressure. This pattern often suggests the beginning of an uptrend, as buying interest gains momentum. Traders interpreting this pattern may find opportunities to enter long positions.
Is a bull market high or low?
Bull markets are typically designated by media outlets as a rise of 20% or more from a near-term low. Likewise, bear markets are called when an asset falls by 20% from its high.
What is a liquidity sweep?
A liquidity sweep is a strategy where big market players push prices into high-liquidity areas to activate orders and absorb available liquidity. This tactic helps them enter or exit large positions with minimal slippage.
What do lower highs and higher lows indicate?
Higher Lows (HL) and Lower Highs (LH) help analyze market trends. Higher Lows (HL) indicate weakening selling pressure and possible upward trends. Lower Highs (LH) show reduced buying strength and potential bearish trends. Use higher lows to buy into strength and lower highs to exit or short-sell.
What is the most important thing in technical analysis?
Technical traders analyze price charts to attempt to predict price movement. The two primary variables for technical analysis are the time frames considered and the particular technical indicators that a trader chooses to utilize.
What is an example of high low pricing?
Phone retailers can also use high-low pricing by giving the devices they sell low prices but pricing their service plans more expensively, as many customers who need to purchase a phone might also need phone service.
What is a loss lead?
"Loss lead" is an item offered for sale at a reduced price that is intended to "lead" to the subsequent sale of other services or items. The loss leader is offered at a price below its minimum profit margin—not necessarily below cost.
What is break even pricing?
The break-even price is the price at which a product generates no profit or loss. In other words, it is the point at which income equals expenses.