#BreakoutTradingStrategy

The term #BreakoutTradingStrategy refers to a methodology in which traders seek to identify points where the price of an asset breaks key levels of support or resistance, typically established beforehand. The idea is to capitalize on the momentum that often occurs after that break, as it may signal the start of a significant trend. Breakout traders apply tools such as trend lines, Bollinger bands, Fibonacci levels, or horizontal consolidation to detect these points. A good breakout strategy includes volume confirmation, meaning a significant increase in trading volume, which indicates strength behind the movement. Additionally, it is crucial to establish stop-loss levels below (in the case of an upside breakout) or above (in the case of a downside breakout) the breakout point, to protect capital against false breakouts.