In the previous lesson, we introduced the "Daily Opening Strategy" and learned how to identify support and resistance starting from the price at the beginning of the day.

This time, we’ll take another step forward and introduce a trading strategy that utilizes the high and low prices (High & Low) from the previous day or previous week.

1. Why are the previous day's high and low important?

Past highs and lows reflect levels that mirror trader psychology:

• High: A point where buyers aggressively bought but could not push higher and the price stalled
  
  

• Low: A point where sellers briefly dominated the market, but the downward momentum stopped
  
  

These levels are strongly remembered by many traders, so when the price re-approaches them, they attract strong attention and tend to function as support or resistance.

2. The "Break & Return" approach I use

In this strategy, the conventional contrarian method of "previous day's high = sell" and "low = buy" is not used.
The reason is the high risk of getting caught in a fake breakout (false breakout).

My procedure is as follows:

1. Confirm that the previous day's high or low is broken
   
   

2. Then, in 1–3 candles (30-minute charts), verify that the price has firmly established in the breakout direction.
   
   

3. Ensure that the broken high/low becomes new support/resistance
   
   

4. When the price returns to that level, enter in the same direction as the trend
   
   

3. Actual entry scenarios

• Bullish scenario (long entry):
  → Break above the previous day’s high
  → Price settles above (1–3 x 30-minute candles)
  → Confirm that the high has become a new support
  → Enter when price returns long

• Bearish scenario (short entry):
  → Break below the previous day’s low
  → Price settles below (1–3 x 30-minute candles)
  → Confirm that the low has become new resistance
  → Enter when price returns short

4. Also applicable on weekly charts

This approach can be applied not only to the previous day’s high and low but also directly to the previous week’s high and low. Applying to weekly charts often marks a larger trend reversal point and is very effective for swing trades.

✅ Summary

A strategy based on the previous day's high and low is a simple yet very powerful breakout trading approach.
However, a solid confirmation of the breakout and proper identification of pullback entry points are essential..

In the next lesson, we will introduce strong vs. weak highs and lows.