#BreakoutTradingStrategy

A breakout strategy aims to capitalise on strong directional market moves. Traders identify support and resistance levels to detect when price breaks out of a trading range. They enter long positions when price breaks above resistance or short positions when price breaks below support.

A breakout occurs when price moves outside a defined trading range. The breakout signals that supply and demand forces are shifting in favour of either buyers or sellers. This imbalance propels price in a new direction as market participants react to the change.

Breakout strategies aim to capitalize on the start of a new trend. Traders use technical analysis to spot trading ranges and pending breakouts. They buy when price breaks above resistance or sell when it drops below support.