Glossary
Breakout
Technical Analysis
A breakout is a move of price beyond an established support, resistance or consolidation boundary, often with rising volume.
Genuine breakouts tend to come after a volatility contraction and are followed by expansion and a retest that holds. False breakouts — where price closes back inside the range within a bar or two — are common, especially at obvious levels where stop orders cluster.
Breakout traders manage this with confirmation rules (a close beyond the level rather than a wick), stops back inside the range, and targets based on the measured height of the prior range.