Strategies
Breakout Trading: Capturing Moves at Key Levels
Breakout strategies enter when price breaks through significant support or resistance with momentum.
Key rules
- Wait for candle close above/below the breakout level, not intrabar
- Volume expansion on the breakout reduces false-breakout probability
- The retest of the broken level is often a better entry
- False breakouts occur frequently — manage with a tight stop
- Stronger prior consolidation → stronger breakout when it occurs
A breakout occurs when price moves through a significant level (horizontal resistance, triangle apex, range high) with expanding volume. False breakouts are common — wait for a confirmed close above the level, not an intrabar wick, and confirm with volume expansion.
The retest of the broken level (now support) often provides a better entry than the initial breakout candle.