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What is a breakout strategy?

Trading basics

A breakout strategy involves entering a trade when a stock’s price moves beyond a defined support or resistance level, expecting the move to continue.

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    Traders wait for price to close beyond a key level with strong volume, treating that as confirmation of a new trend. False breakouts — where price reverses right after breaking the level — are a common risk, which is why volume and follow-through are checked first.

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