Chart Patterns
Breakout
When price moves beyond a defined support or resistance level.
Full Definition
A breakout occurs when price moves decisively through a significant support or resistance level, often accompanied by increased volume. Breakouts can signal the start of a new trend or continuation of an existing one. False breakouts (fakeouts) are common, so traders often wait for confirmation before entering.
Example
EUR/USD consolidates between 1.0800 support and 1.0900 resistance for two weeks. When price breaks above 1.0900 with strong momentum and volume, this is a bullish breakout signaling potential further upside.
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