Breakout trading can be an interesting thing… of course if you know how exactly to trade them.
And in order to trade them, you need to have full understanding of the types of breakouts. And here we can deal with two types: continuation and reversal breakouts.
Reversal breakouts in the rapid and strong movement of the market that goes against the previously existing trend. It is usually preceded by the so-called consolidation with is just a part of the market where it is ranging. It exists between resistance and support level, just like ranging market should.
Continuation breakout in its turn is a rapid and fast movement of the market keep on with the existing trend. It is also usually preceded by consolidation.