Breakout

What is a Breakout?

A breakout occurs when price moves decisively above a resistance level or below a support level, typically with increased volume. It signals that the balance between buyers and sellers has shifted.

Breakout trading

• Volume confirmation: breakouts on high volume are more likely to sustain
• Retest: price often comes back to test the breakout level before continuing
• False breakouts: price briefly breaks a level then reverses, trapping traders

Many traders wait for a breakout and retest pattern rather than buying the initial breakout to avoid fakeouts.