Previous day high-low breakout trading strategy – Forex Binary Options Day Trading Breakout Strategy using Previous Day High/Low, Moving Average Trend, and Momentum. This technique can be used for any market that has a decent daily range.
Find the Daily Trend – The “HI-Low Breakout” approach is designed to find entries with the trend when price breaks from a key point of support or resistance.
Since we will be selling in a downtrend and buying in an uptrend, the first task of this strategy is to find the trend.
Periodically check to see how Daily Prices are progressing.
- If prices are in an uptrend, we’ll pay attention as they near the high we marked to see if they break and close above that high.
- If prices are in a downtrend, we’ll pay attention as they near the low we marked to see if they break and close below that low.
Below we can see an example of how Daily Prices are progressing on an EURUSD Daily chart.
The trend is considered to be up. Once the primary trend is found, keep this information in mind as we move forward and consider market entries.
- Price breakout above yesterday high
- ADX Histogram blue color bars
- MACD X upward above 0 level
- Signal Trend green color
- Price breakout below yesterday low
- ADX Histogram magenta color bars
- MACD X upward below 0 level
- Signal Trend red color
This Forex and Binary Options trading strategy is easy to follow and doesn’t require much time each day to carry out.
A stop loss order is recommended of course and in the case of long trades, we should usually set it below the most recent low. Respectively, the stop loss order for short trades should be set above the most recent high.
Additionally, the trading system performance can be further improved by combining the rules above with other elements of technical analysis, like support and resistance levels, Fibonacci retracements, ascending and descending triangles or other formations.