Every trading underlying has a trading range at any day. In other words, on any given day, the trading underlying will move between two prices (high and low). Our main strategy should be to trade the underlying when it is about to start its biggest move for intraday (May it be upside or downside). To explain this, let us take a very simple example
Example 1: The stock ABC is trading at 100 at any point of time during the day. In another half hour it starts its sharp upward movement and creates new high. Our main strategy should be to catch a part of that sharp move (we cannot take the benefit of entire sharp upward movement or downward movement. And this is what we try to do with breakout method. We try to take benefit from a small part of sharp upward movement or downward movement.