📊 Price Action·intermediate

Breakout

When price moves decisively through a significant support or resistance level, often triggering a new trend.

A breakout is when price punches through a level that had been holding. It's called a breakout because price is "breaking out" of its range. Traders love breakouts because they often mark the start of strong directional moves — stops trigger, momentum builds, and the new move can run for hundreds of pips. Not all breakouts are real. A "false breakout" is when price briefly pokes through a level, then reverses and closes back inside the range. Those trap breakout traders who went long on the breach. Confirming a breakout usually means waiting for a candle to CLOSE outside the level on a meaningful timeframe (1H, 4H, daily). The best breakouts come AFTER a long consolidation. The longer price ranges, the bigger the move usually is when it finally breaks.

Real trade example

Gold broke above $2,075 in Mar 2024 after 3 years of resistance. The retest came 2 days later at $2,080, then price ran $700 higher to new ATHs over the next year.

Related terms

Triple Top

intermediate

A three-peak reversal pattern where price tests the same resistance level three times and fails — a stronger version of the double top.

Triple Bottom

intermediate

A three-trough reversal pattern where price tests the same support level three times and holds — a stronger version of the double bottom.

Ascending Triangle

intermediate

A bullish continuation pattern with a flat top and rising bottom — buyers keep stepping in higher while sellers defend the same level.

Descending Triangle

intermediate

A bearish continuation pattern with a flat bottom and falling top — sellers keep stepping in lower while buyers defend the same level.

Symmetrical Triangle

intermediate

A neutral continuation pattern with a falling top and a rising bottom — both sides squeeze toward the apex before a breakout.

Bull Flag

beginner

A short-term continuation pattern where price pulls back in a tight downward channel after a strong rally — usually breaks higher.

← Back to glossary Ask the desk a follow-up →