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Overexposure is the bane of all photographers. When an image is overexposed, highlight areas can blow out to complete detailless white. Underexposure is not as pesky a problem, because if a shadow underexposes to complete black, it often just looks like a really dark shadow. Highlight tone priority is a feature that can dramatically reduce overexposure in an image. Consider this image, which has badly overexposed highlights. Now here's the same image shot with highlight tone priority turned on. Note that the overexposed bits now have detail in them.
For JPEG shooters, highlight tone priority can really mean the difference between usable shots and overexposed rejects. Now, as with many really, really good things, there is a price to pay for using highlight tone priority. While your highlights will be better exposed, there is a slight chance that your shadows will have more noise in them; those annoying speckly patterns. So for this reason, highlight tone priority defaults to being turned off. Now, for the most part, it's best to try to control overexposure through better exposure choice; dialing down your exposure with exposure compensation, for example.
But if you are in a situation where you need to shoot quickly, or if you are shooting something bright white, like a wedding dress, then dialing down exposure is a drag, because the bright white thing will go kind of dingy. So in those situations, highlight tone priority can be a real lifesaver. Highlight tone priority is either simply on or off. By default, it's Off. This is in the third page of the shooting menu. I can go down here and Enable it, which has this D+ next to it, and so when I Enable it I have this D+ here, which might be a little demoralizing when you just see it in here, but what they are actually referring to is more dynamic range.
As soon as I enable highlight tone priority, the camera will automatically disable the auto lighting optimizer. And notice that with this turned on, I might see a little bit more noise in my images than I would without it. So you want to keep an eye on that. Finally, it's also going to change my ISO range. When I turn on the highlight tone priority option, my ISO range is going to go from 200 to 25600. So I'm going to lose the bottom end of my ISO range. So most of the time, you'll probably want to keep this off, but again, if you were shooting in a situation where you are trying to capture bright highlights, like a woman in a wedding dress, this is a great option to help ensure that you don't suffer overexposure.
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