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A breakout is a technical pattern that forms on a chart when the price of an asset moves above a resistance level or below a support level.

Understanding the Term

In technical analysis (TA), a breakout denotes when the movement of the price of a certain asset changes. It usually signals the potential for the price to start trending in the breakout direction.

When a breakout is accompanied by high trading volume, it signifies a higher chance the asset will continue trending in the same direction, as opposed to a breakout with low trading volume.

Sometimes, a price of break occurs outside of a defined range but quickly recedes back into range and is then referred to as a false break or fakeout.


Breakouts are typically preceded by a period of decreased volatility.

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