The breakout trading strategy is one of the common and effective strategies in financial markets, focusing on identifying opportunities when the price of a financial asset breaks through a key support or resistance level. This breakout can indicate the beginning of a new and strong trend, providing potential entry points for traders.

How it works

The basic idea is that prices often move within certain ranges, known as support and resistance levels. The support level is the price at which the asset tends to stop falling and rise again, while the resistance level is the price at which the asset tends to stop rising and fall again.

When the price decisively breaks through one of these levels, either upward (resistance breakout) or downward (support breakout), it indicates that buying or selling pressure has overcome the other side, which may lead to significant price movement in the direction of #BreakoutTradingStrategy .