September 14th, 2011 
admin What Does Breakout Mean?
A price movement through an identified level of support or resistance, which is usually followed by heavy volume and increased volatility. Traders will buy the underlying asset when the price breaks above a level of resistance and sell when it breaks below support.
The real plot or the mental line on the chart is generally comes from one of the classic chart patterns. A breakout often leads to a setup and a resulting trade signal.
The breakout is supposed to herald the end of the preceding chart pattern, e.g. a bull breakout in a bear trend could signal the end of the bear trend.
This chart shows a stock that has historically encountered a lot of resistance near $37, but notice how it heads sharply higher following the breakout.
No related posts.
Posted in 
