The way I trade this setup is to wait for the market to test the low or high of the previous day and then pullback. I don’t enter on a break of the previous day’s high/low, I wait for a pullback of either a test of the high/low or a break of the high/low.
As you can see from the chart, the market came down and tested the low of 1.7864 and then pulled back. The low that was made was just a few pips lower than the previous day’s low and formed a little support area. That support area is the breakout point.
You can place an entry order a couple of pips below the support area with a target of the average “”YL-TL”” as a target, which in this case was 60 pips. The stop is a bit more tricky. If the pullback is not too big you can place your stop just above the pullback area (resistance). If the distance is too great, then just use a Dollar stop. ”