#BreakoutTradingStrategy 📖 Understanding Breakouts
A breakout happens when the price of a cryptocurrency moves beyond a clearly defined range. This can go two ways:
📈 When the price moves above resistance, it’s called a bullish breakout.
📉 When the price drops below support, it’s a bearish breakout.
🔍 How the Strategy Works
1️⃣ Spot a Range or Consolidation Zone
Look for times when the price is trading sideways within a tight zone. Common chart patterns include:
🔺 Ascending or descending triangles
🚩 Flags and pennants
📦 Rectangular ranges
🪜 Wedges
2️⃣ Mark Important Levels
Identify the key price zones:
🟢 Support – the level where price often stops falling
🔴 Resistance – the level where price often stops rising
3️⃣ Wait for a Breakout with Volume
Once price breaks out above resistance or below support, check the volume. 💥 High volume can confirm that the breakout is strong and more likely to continue.
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