Mastering Breakouts – Spot the Move Before It Happens
Breakouts are powerful signals of potential momentum and trend continuation — but not all breakouts are created equal.
Here's a breakdown of the 3 most common types:
1. Descending Triangle (Lower Highs + Support)
A bearish pattern where price forms lower highs while holding a horizontal support level.
Once the support breaks, it triggers a strong downside move (breakdown).
Volume confirmation boosts reliability.
2. Range Breakdown (Horizontal Resistance & Support)
Price consolidates in a tight horizontal range.
A breakdown from the support zone signals bearish continuation.
Common after large moves as the market cools before another leg.
3. Ascending Triangle (Higher Lows + Resistance)
A bullish setup where price forms higher lows while facing horizontal resistance.
A breakout above resistance often starts a bullish rally.
Volume spike is key for confirmation.
Tip: Always wait for candle close and retest for better entries. False breakouts are common traps!
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