#BreakoutTradingStrategy A breakout strategy in trading is when an asset price moves outside a defined support or resistance level with increased volume.

Following this, a breakout strategy is a popular trading approach used by active traders to take a position within this trend's early stages. This strategy is often the starting point for large price moves and increased volatility.

A breakout trade involves entering a long position after the asset price breaks above a resistance level or goes short if it breaks below the support level. Once the asset trades beyond the perceived 'price barrier', volatility tends to increase. The asset price will then trend in the breakout's direction.

Traders are always looking for strong momentum and the actual breakout can be a sign to enter a position and profit from the market movement.

Breakouts are common in most markets. Large price movements are typical within channel breakouts and price pattern breakouts, such as the well-known head-and-shoulders, triangle and flags patterns.1 This pervasiveness is a key reason for the strategy's popularity.

Whether you are a position trader or you prefer to skim profits off several daily trades, the concept tends to work equally well, regardless of your timeframe.