Breakout and Breakdown Trading1. Introduction to Breakout and Breakdown Trading
In financial markets, price movement is influenced by the forces of supply and demand. Traders identify key levels where these forces tend to converge and then anticipate movements when price “breaks out” above a resistance level or “breaks down” below a support level.
Breakout Trading: A strategy that involves entering a position when the price moves above a defined resistance level with the expectation of further upward momentum.
Breakdown T
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