Breakout

A breakout occurs when price moves decisively beyond a defined level of support or resistance, often accompanied by increased momentum. In forex trading, breakouts signal the potential start of a new trend or the continuation of an existing one. Traders use breakouts to enter positions in the direction of the move, expecting price to sustain its new trajectory. False breakouts, where price briefly pierces a level before reversing, are common and can be filtered using confirmation signals such as candlestick patterns or volume analysis before committing to a position.