Definition of breakout in finance

A breakout is a term used in technical analysis for trading and refers to the price movement of an asset through a level of support or resistance. A breakout will usually involve large volumes being traded and high volatility.

When an asset breaks through a level of resistance, it is likely that it will spike upwards in price and when it breaks through a level of support, it will most likely crash in price. This is because the levels of support and resistance are generally accepted 'safe zones' and a breakout refers to something unusual happening in the market so any effects tend to be exaggerated, at least in the short term.

Be the first to comment!

You must login to comment

Related Posts

 
 
 

Loading