#BreakoutTradingStrategy

Enter early in high-momentum moves just as price breaks above resistance or below support.

📉 Works Best In:

Volatile markets (crypto, stocks, forex)

Consolidation phases followed by sudden volume surges

Patterns like triangles, flags, ranges, wedges.

🔍 How to Identify Breakouts

1. Price Patterns

Ascending Triangle: Bullish

Descending Triangle: Bearish

Flat Range: Horizontal support/resistance

Bull/Pennant Flag: Continuation pattern

2. Volume Confirmation

Breakout must be supported by a spike in volume

Low-volume breakouts = fakeouts (often reverse)

3. Pre-Breakout Signs

Tightening price action

Decreasing volatility (squeeze)

Indicators like Bollinger Band Squeeze or low ATR

🔑 Entry & Exit Rules

✅ Entry

Enter on candle close above resistance (or below support for shorts)

Confirm with volume spike or indicator (e.g., MACD crossover, RSI > 60)

❌ Stop-Loss

Place just below the breakout level (or below recent swing low)

Prevents getting wrecked by fakeouts

🎯 Take Profit Targets

Measured move: Height of previous range added to breakout point

Use Fibonacci extensions (e.g., 1.618) or trailing stop.

🛠️ Indicators to Use

📏 Volume (OBV, Basic Volume)

📐 RSI/MACD for momentum confirmation

🧭 Bollinger Bands – breakout from band contraction.

🧮 ATR – to size stop-loss dynamically

🔺 VWAP – breaks above VWAP = strong bullish sign.

⚠️ Avoiding Fakeouts