Breakout Trader (redirected from Breakout Trading)

Breakout Trader

A type of trader who uses technical analysis to find potential trading opportunities, identifying situations where the price of an asset is likely to experience a substantial movement over a short period of time. Breakout traders generally look for key levels of support and resistance and will place transactions when the asset's price passes through these levels. Long positions are taken when the price of an asset breaks through a level of resistance, and as shown in this example, a short position is taken when the price breaks below a level of support.

Notes:

Many breakout traders find trading opportunities by identifying chart patterns such as ascending triangles, descending triangles, head and shoulders, etc. These types of traders will generally set up target prices to be equal to the distance between support and resistance levels.

See also: Breakout, Chartist, Head and Shoulders Pattern, Long (or Long Position), Pattern, Resistance, Support, Technical Analysis, Triangle