A breakout occurs when the price moves beyond a certain level.
So, breakout trading is entering trades when momentum is in your favor.
To understand breakout trading, it is important to remember two types of breakouts. Our team at Trading Strategy Guides has identified two types of breakout trading setups:
Breakout trading is an attempt to enter the market when the price moves outside a defined price range (support or resistance).
However, a genuine breakout needs to be accompanied by increased volume