#BreakoutTradingStrategy Traders are always looking for strong momentum, and the actual breakout can be a sign to enter a position and hopefully profit from the market movement.

Breakouts are common in most markets. This pervasiveness is a key reason for the strategy's popularity. Large price movements are typical within channel breakouts and price pattern breakouts, such as the well-known head-and-shoulders, triangle, and flags patterns.¹

Further, it can be a solid trading tactic. Whether you’re a position trader or you prefer to skim potential profits off several daily trades, the concept tends to work well if the market moves in your favour, regardless of your timeframe.

Of course, there are a couple of caveats to be aware of:

Traders using breakouts usually place 'take-profit' and 'stop-loss' orders to manage their risk

Like all trading strategies, there’s no guarantee of returns. Just because a strategy is popular doesn’t necessarily mean that your trade will be successful