#BreakoutTradingStrategy

Breakout trading is a popular strategy that allows for generating profits through the analysis of breakouts, based on the charts of support and resistance levels.

A breakout (or break) occurs when the price of an asset exceeds a defined level of support or resistance with increased volume.

A breakout trading strategy (or break trading) is a popular approach in the stock market, adopted by active traders to take positions early in the trend. The breakout often marks the starting point of significant price movements and heightened volatility. When approached meticulously, breakout trading can even contribute to more effective risk management.

A breakout trade involves taking a long position when the price of the asset surpasses a resistance level, or a short position if the price moves below the support level. Once the asset trades beyond the perceived "barrier price," volatility tends to increase. The price of the asset generally then follows the direction of the breakout.