Breakout

Resistance Breakout Price breaks above a level that previously acted as a ceiling. This is a bullish signal suggesting buyers have overwhelmed sellers.

Support Breakdown Price breaks below a level that previously acted as a floor. This is a bearish signal showing sellers have overwhelmed buyers.

Range Breakout Price exits a consolidation range (trading between defined support and resistance). The direction of the break often leads to a sustained move.

Volume Confirmation Valid breakouts typically occur on above-average volume. Low volume breakouts are more likely to fail.

Close Beyond Level Waiting for a candle to close beyond the level reduces false signals. A wick beyond but close inside is often a fake-out.

Retest After a breakout, price often returns to test the broken level. Successful retests confirm the breakout's validity.

Entry Strategies: 1. Immediate entry when price closes beyond level 2. Wait for a pullback to the broken level 3. Use a stop order to enter only if price continues

Stop Loss Placement: Below the broken resistance (for longs) or above broken support (for shorts)

Profit Targets: Measure the prior range and project that distance from the breakout point