Breakout trading is one of the most dynamic strategies in my arsenal. It provides excellent entry points on strong momentum, but only if the breakout is genuine.
I never open a position immediately on the breakout candle. I always wait for confirmation:
— either a retest of the level that has become support
— or volume exceeding the average in that range
— or a combination of signals from indicators such as MACD or volumes on lower timeframes
To avoid false breakouts, I also pay attention to the overall market context: if the market is in a flat or lacks a clear structure — it’s better to refrain from taking a position.
Risk management is key. Breakouts can sometimes trigger stops, even when the overall idea is correct. Therefore, I always set a clear level where the scenario becomes invalid — and I don’t hold onto a position out of emotion.
A breakout is not just an opportunity. It’s also a test of endurance and precision.