#BreakoutTradingStrategy What is a Breakout?

A breakout occurs when the price moves decisively above a resistance level (bullish breakout) or below a support level (bearish breakout). This usually signals a shift in supply and demand — new buyers step in, or sellers capitulate — and can lead to strong momentum in the direction of the break.

Why Breakouts Matter

Markets often trade sideways in ranges or consolidate after trends. A breakout signals the end of indecision and the start of a new trend or continuation of an existing one. When combined with high volume, breakouts can lead to explosive price movements — exactly what short-term traders look for.