A breakout strategy involves entering trades when an asset’s price moves beyond a defined support or resistance level, signaling a potential shift in market direction. Traders look for consolidation patterns—such as triangles or rectangles—followed by strong volume-backed price movements to confirm breakouts. This strategy capitalizes on increased volatility and new trends, often leading to substantial price moves. To avoid false breakouts, traders use filters like volume thresholds or time-based confirmation. Breakout trading is widely used in stocks, forex, and commodities and suits traders who prefer clear, visual signals. Success depends on patience, discipline, and proper risk management to protect against misleading price spikes.