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Definition of 'Breakout Trader'
A type of trader who uses technical analysis to find potential trading opportunities, identifying situations where the price of an asset is likely to experience a substantial movement over a short period of time. Breakout traders generally look for key levels of support and resistance and will place transactions when the asset's price passes through these levels. Long positions are taken when the price of an asset breaks through a level of resistance, and short positions are taken when the price breaks below a level of support.
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Investopedia explains 'Breakout Trader'
Many breakout traders find trading opportunities by identifying chart patterns such as channels, ascending triangles, descending triangles, head and shoulders, etc. These types of traders will generally set up target prices to be equal to the distance between support and resistance levels.
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Wondering what it means to be a "logical trader"? Take a look at this system devised by Mark Fisher.
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Sometimes you have to be a predator to profit. Find out how to cash in on false breakouts.
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We'll walk you through this trading strategy from start to finish.
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This bullish trading strategy offers unlimited potential profit with limited risk.
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It isn't making money on each trade that counts, but developing a long-term plan that works.
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This is often the first - and most costly - level of analysis to be overlooked.
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We take a closer look at ascending and descending triangles to help traders predict the ultimate breakout direction.
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