#BreakoutTradingStrategy 🔍 What Is a Breakout?

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⚙️ Key Breakout Patterns

🧠 Entry Strategies & Confirmation

Seek strong volume (e.g., ≥40% above average) at breakout

Optional retest: wait for price to revisit the breakout level to confirm new support/resistance

🚦 Risk Management Essentials

Stop-loss just inside the base or below the breakout level (e.g., 5% inside)

Position sizing: limit risk per trade to 1–2% of capital

Take-profit targets: measure pattern height or use Fibonacci/resistance zones

Use stage analysis: base-counting (e.g., flat, cup‑and‑handle, VCP) helps identify where the stock is in its growth cycle and manage risk

📈 Advanced Filters & Indicators

VCP (Volatility Contraction Pattern): price gets tighter with volume decline near a moving average (e.g., 21‑EMA) before breakout

Moving-average breaks: price breaking key MAs (50‑day, 200‑day) or golden/death cross

Bollinger Band squeeze: tight bands followed by price move with volume

Momentum indicators: MACD or RSI supporting breakout confirms trend strength

⚠️ Avoiding Fakeouts

Don’t chase initial spikes—wait for verification