Charting & Price Action
Beginner
Breakout
Also called: breakout entry
When price moves decisively beyond a support, resistance, or chart pattern boundary — signals new trend or continuation.
Definition
Breakouts attract momentum traders — once a level breaks, stops above/below are triggered and new orders pile in. The danger: false breakouts where price pops just above resistance only to reverse.
Volume (or tick-volume in FX) and close beyond the level (not just a wick) are the standard confirmation filters.
Example
EUR/USD has ranged 1.0800–1.0860 for two weeks. Daily close above 1.0860 on a wide-range bar → breakout long, with stop below 1.0800.