Price action and chart patterns
Breakout trading
Price leaves a range or crosses a key level with a candle that closes clearly beyond it.
Why it works
A range stores orders on both sides. When one side wins, stops and new entries fuel a fast move in that direction.
How to use it
Wait for a close beyond the range, not just a wick. Enter on the close or on the retest, stop back inside the range.
The typical mistake
Entering on the first wick above the range: half of the time it is a false breakout.
FAQ
What is Breakout in trading?
Price leaves a range or crosses a key level with a candle that closes clearly beyond it.
How do you trade Breakout?
Wait for a close beyond the range, not just a wick. Enter on the close or on the retest, stop back inside the range.