#BreakoutTradingStrategy 📈 Breakout Trading Strategy Explained (120 Words)

Breakout trading is a popular strategy where traders enter positions as the price moves beyond a defined support or resistance level with strong volume. The idea is to catch momentum early, as breakouts often lead to powerful trends. Key components include identifying consolidation zones, chart patterns (like triangles or rectangles), and watching for volume spikes to confirm the move.

Traders often set buy orders slightly above resistance or sell orders below support, placing stop-losses inside the prior range to manage risk. Popular tools include moving averages, Bollinger Bands, and RSI to validate breakouts. While breakouts can offer high reward-to-risk setups, false breakouts (fakeouts) are common—so combining technical indicators with volume is essential for confirmation.