#BreakoutTradingStrategy second information on INVESTING.COM that says:

What is the Best Technical Analysis Strategy: Breakout or Pullback?

Wano Carvalho | 01.05.2022 18:31

Hello, investor friend!

I’ll get straight to the point: it depends! That's right, it depends on your risk asymmetry, operational style, and also leverage (mainly).

However, since I hate fence-sitters, I will give my opinion in this article!

And it starts like this: 70% of breakouts are false!

I will contextualize what a breakout is and what a pullback/rebound is:

READ MORE: This Indicator Will Make You Stop Chasing Tops and Bottoms

Breakout: It is when the price goes through a strong area of support/resistance, breaking it and renewing the high/low. It is commonly used when looking for trend patterns such as pivots. It is always observed along with volume, which helps to identify if it could be a false breakout.

Pullback/Rebound: Movement opposite to the market direction, which can be caused by profit/loss realization by investors, as well as news and the like. Movements that respect Fibonacci retracements are usually considered pullbacks, a crucial tool for identifying these price retracements.

Pullbacks are seen in markets that are rising and retrace, while rebounds occur in falling markets that retrace in the opposite direction.