IThe "Breakout" strategy means:

\u003e "Enter a buy or sell trade when the price breaks a significant level on the chart."

In other words: we wait for the price to move out of a calm or fluctuating state (narrow range) and break a resistance or support level, and we enter the market in the same direction as this breakout.

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🧱 Important Levels: Support and Resistance

Support: is a price level that prevents the price from falling further. (Floor)

Resistance: is a price level that prevents the price from rising further. (Ceiling)

Simple Example:

If the price of a currency is moving between $90 and $100 for days,

Then suddenly it breaks $100 and rises,

This is called: Bullish Breakout.

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📈 Steps to Implement the Strategy

1. Define the Range:

Look for an area where the price moves between a support and resistance level for a period (called consolidation).

2. Draw the Lines:

Use technical analysis tools to draw the resistance line (above) and the support line (below).

3. Wait for the Breakout:

Do not enter the trade immediately; wait for one (or more) candle(s) to confirm that the price has clearly broken one of the lines.

  1. 4. Enter the Trade:

If the price breaks the resistance upwards → Buy entry.

If the price breaks the support downwards → Sell entry.

5. Define the Stop Loss:

Place it below the resistance level (in case of buying), or above the support (in case of selling).

6. Define the Target (Take Profit):

You can place it based on:

Length of the previous range (the difference between support and resistance).

Or based on Fibonacci ratios.

Or through other technical signals.

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📊 Additional Confirmation Tools (to increase accuracy)

Trading Volume:

If the breakout occurs with an increase in volume → Strong signal.

Indicators such as:

RSI (to avoid entering during saturation).

MACD (to confirm the trend).

Moving Averages (to support the overall trend).

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⚠️ Important Tips

Not all breakouts are real; most of them are false (false breakout), so momentum should be monitored at the breakout, and it is better to wait for a retest of the broken level before entering.

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