Breakout Trading

Range trading is a trading strategy that focuses on identifying and capitalizing on price movements within a defined range. This range is typically characterized by a consistent oscillation between two price levels - support and resistance. Support is the price level where demand tends to prevent the asset from falling further, while resistance is the level where selling pressure prevents the price from rising. Traders using this approach buy at the support level and sell at the resistance level, aiming to profit from predictable price fluctuations within this confined range.

In trading, a "breakout" means a price movement that occurs when an asset moves beyond a determined support or resistance level. This pivotal moment signals a shift in market dynamics and often leads to notable price changes. Breakouts occur when the price surpasses a level that has previously acted as a barrier, such as a previous high (resistance) or a previous low (support).