#BreakoutTradingStrategy 🔑 Key Components of a Breakout Trading Strategy:

1. Support and Resistance Levels

• Resistance: A price level where upward movement is expected to stall due to selling pressure.

• Support: A price level where downward movement is expected to pause due to buying pressure.

2. Breakout

• Occurs when price moves above resistance (bullish breakout) or below support (bearish breakout).

3. Volume Confirmation

• High volume during the breakout is used to validate the move and reduce the likelihood of a false breakout.

4. Entry Point

• Traders typically enter right after the breakout is confirmed, sometimes waiting for a retest of the broken level.

5. Stop-Loss

• Placed just below (in bullish breakouts) or above (in bearish breakouts) the breakout level to manage risk.

6. Profit Target

• Often based on measured moves, technical indicators, or risk/reward ratios (e.g., 2:1 or 3:1).