Breakout

    0
    672

    BreakoutA breakout is where a price movement manages to overcome a support or resistance level. It is usually followed by an increase in volatility and volume.

    Traders will look to buy an asset when the price is breaking through a line of resistance and sell when the price is breaking through a line of support.

    The chart below illustrates the buyers in the market attempting to push the price up further, but initially unable to break through the level of resistance (1). After several attempts, it finally manages to break through. This is a clear demonstration of a breakout (2) through resistance.

    Breakout chart MetaTrader 4

    Further reading
    We take advantage of breakouts in the beginner strategy. Learn how to start your trading career now:

    Forex trading beginner strategy

    Learn more on how to trade a breakout using support and resistance: