Breakout

A breakout is when the price of an asset moves above a resistance level or below a support level. Breakouts are often followed by a period of high volatility and can signal the start of a new trend.

• Bullish Breakout: Occurs when the price breaks above a resistance level.
• Bearish Breakout: Occurs when the price breaks below a support level.

Traders often look for breakouts to enter new positions. However, it is important to be aware of "false breakouts," where the price breaks a level but then quickly reverses. Volume can be a useful tool to confirm a breakout. A breakout accompanied by high volume is more likely to be genuine.