Breakout Trading

Trading breakouts can be useful for position traders as they can signal the start of a new trend.
Breakout traders using this technique are attempting to open a position in the early stages of a trend.
A breakout is where the price moves outside defined support or resistance levels (preferably confirmed with increased volume).
The idea behind trading breakouts is to open a long position after the price breaks above resistance or open a short position when the price breaks below support.
To successfully trade breakouts, you will need to be confident in identifying periods of support and resistance.
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