Breakout
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A breakout occurs when price moves decisively beyond a defined level such as a range high, trendline or consolidation boundary. It signals that the balance between buyers and sellers has shifted and can start a sustained move. Breakouts also fail often, so traders look for confirmation through follow-through, expanding range and a successful retest of the broken level.
Full explanation
Genuine breakouts usually show volatility expansion, decisive closes beyond the level and continuation rather than an immediate return inside the range. False breaks — where price pokes through and snaps back — frequently occur at session opens and around scheduled data. Two common approaches are entering on the break with a stop back inside the range, or waiting for the retest and entering on confirmation with a tighter stop and a lower hit rate on missed moves.
Why traders watch it
Breakouts offer clean entries with defined risk, but false breaks are common around news and thin liquidity — confirmation is what separates the two.
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Bearish candle
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Bollinger Bands
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Bullish candle
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Candle
A single bar on a candlestick chart showing the open, high, low and close for one period.
Candle close
The price at which a candle finishes its period — the standard evidence that a move is genuine, not a spike.