Breakout
A breakout happens when price moves above resistance or below support with conviction, usually accompanied by increased volume. It signals a new trend is starting.
Understanding the Concept
Breakouts are where the big money's made. Ranges are boring. Breakouts are where assets go parabolic. When Bitcoin finally breaks above $50k resistance after testing it five times, you don't want to be sitting on the sidelines. The key is confirmation—volume matters. Low-volume breakouts are fake-outs. High-volume breakouts are real. You want to see at least 50% more volume than average. Also watch for the retest. Price often comes back to test the broken level before continuing. That's your second chance to get in if you missed the initial break.
Real-World Example
SOL's been stuck between $90-$110 for three weeks. It breaks $110 with 3x normal volume and closes at $115. You buy the breakout or wait for the retest to $110 (now support). Target is the height of the range added to the breakout: $110 + $20 = $130.
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