Breakout trading education
Questions answered
What is breakout trading?
Breakout trading is a strategy that watches for price to move beyond an important level, such as resistance, support, or an all-time high.
What is momentum trading?
Momentum trading focuses on assets that are already moving strongly. Traders try to participate while the move continues instead of predicting the bottom.
What is price discovery?
Price discovery happens when price trades in territory with little or no previous history. New ATH breakouts are a common example.
What is resistance?
Resistance is a price area where sellers previously stopped or slowed a move upward. An all-time high is one of the most visible resistance levels.
What is support?
Support is a price area where buyers previously defended the market. After a breakout, the old ATH can sometimes become support.
What is volume confirmation?
Volume confirmation means the breakout is supported by above-normal trading activity, which can make the move more credible.
What is consolidation below an ATH?
Consolidation below an ATH means price is moving sideways near the old high. This can build pressure before either a breakout or rejection.