Previous-day high/low breakout
The previous-day high and low are among the most watched levels in intraday trading. This version turns them into an always-in-the-market system on NIFTY futures: buy when price breaks above yesterday's high, reverse to short when it breaks below yesterday's low, and carry the position overnight. The levels update every day, so the opposite level acts as a trailing stop-and-reverse.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
An always-in breakout system lives or dies on whether moves follow through. In this test, positions held while NIFTY fell more than 1% made ₹4,38,043 over 24 trades and those held through rises of over 1% made ₹82,054, but the 68 positions held through sideways stretches within ±1% lost ₹4,20,478: price kept crossing yesterday's high and low, flipping the position at a loss each time. The entry day showed the same split. Entries on choppy, wide-range days lost ₹3,47,296 over 44 trades with a 16% win rate, while entries on quiet sessions made ₹2,42,959. Expiry-day entries lost ₹1,93,389 over 27 trades.
About this strategy
- Each session, take the previous day's high and low of the NIFTY near-month future and add a 1-point filter beyond each.
- The first tick above the previous day's high goes long one lot, reversing any short.
- The first tick below the previous day's low goes short one lot, reversing any long; a gap open beyond a level fills at the first tick.
- Hold the position overnight until the opposite level breaks; the levels move each day.
- On the futures expiry day, close at 15:15 and reopen the same side in the next month's contract at the next session's first tick.
- A long-only option closes longs on a low break instead of going short.
Why traders use it
Yesterday's high and low mark where buyers and sellers were stopped in the last session, so a break beyond them often brings in fresh orders. Staying in the market means the system never misses a big trend, and because the levels move each day, the stop trails the price automatically. It is a pure trend-following system with no indicators, easy to run on futures, and it shows clearly how much of a year's movement comes from a few strong trends.
The year in plain words
On NIFTY futures from 1 Oct 2025 to 30 Sep 2026 the system made 129 trades and lost ₹24,594 before costs, a profit factor of 0.97, and ₹64,200 after ₹20 per order and bid-ask slippage. Only 34% of trades won, but winners averaged about ₹19,720 against losers of about ₹10,500. The year swung violently: March 2026 made ₹1,80,439 on one strong trend, while February lost ₹1,04,512 and April and May lost over ₹1.4 lakh together. The maximum drawdown before costs was about ₹2.23 lakh, far larger than the final result. Fifty-four trades ended on a high break, 62 on a low break and 12 at the monthly roll.
What the settings do
Risks
- The position is always open overnight, so gaps can jump past the reversal level; the worst trade lost about ₹57,270.
- Drawdowns can reach several lakh rupees per lot during sideways spells before a trend appears.
- Results depend on catching a few big trends; missing one can turn a year negative.
- Monthly rolls add extra orders and roll cost each month.
Who it suits
Trend followers with full futures margin, a long time horizon and the patience to sit through long losing runs, who accept that one or two trends may make or break the year.
Questions traders ask
What is the previous day high low breakout strategy?
It uses yesterday's high and low as triggers. A break above the high is treated as bullish and a break below the low as bearish. In this version the system is always in the market, reversing from long to short and back as the levels break.
Is the PDH PDL breakout profitable on NIFTY?
Not in this backtest. On NIFTY futures from 1 Oct 2025 to 30 Sep 2026 it lost ₹24,594 before costs and ₹64,200 after ₹20 per order and bid-ask slippage, over 129 trades. Statutory charges were excluded. One month made ₹1,80,439, showing how lumpy it is; past results do not guarantee future ones.
What does always in the market mean?
After the first trade, the system always holds either a long or a short position. It never goes flat except to roll the futures contract, so it is fully exposed to every overnight gap.
Does long-only help?
The long-only setting closes longs on a low break instead of shorting. In a rising market it avoids losing shorts, but it also misses gains from sharp falls, which were the most profitable moves in this test.