#BreakoutTradingStrategy

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.

Key aspects of breakout trading

Identifying trading ranges and breakout levels

Entering on valid breakout signals

Managing risk using stop-losses

Riding the emerging trend