Breakout
Price breaking outside established support/resistance level or chart pattern.
A breakout is a situation where price breaks through an established support or resistance level with increased volume, signaling potential continuation in the breakout direction.
Types of breakouts:
•Bullish breakout — price breaks resistance upward
•Bearish breakout — price breaks support downward
•False breakout (fakeout) — apparent breakout quickly returning inside range
How to confirm valid breakout: 1. Volume — should be significantly higher than average (2-3x) 2. Candle close — price needs to close outside level, not just "touch" 3. Retest — price returns to test the broken level (now resistance → support) 4. Timeframe — breakouts on higher timeframes (4H, D) are more reliable
Retest strategy:
•Don't enter immediately on breakout
•Wait for retest of broken level
•Enter with stop-loss below retested level
•Better risk/reward, lower fakeout risk