What is The range breakout?

A range breakout occurs when the price of an asset breaks out of a trading range, or a period of time when the price has been moving within a relatively narrow range or a specific price range, without establishing a clear trend in either direction.

When the price breaks above the upper boundary of the trading range, it is considered a bullish breakout, indicating that buyers are taking control and the asset`s price may continue to rise. Conversely, when the price breaks below the lower boundary of the trading range, it is considered a bearish breakout, indicating that sellers are taking control and the asset`s price may continue to fall.

Traders often use technical analysis to identify trading ranges and potential breakout opportunities. They may use a variety of indicators and tools, such as trend lines, moving averages, and volume indicators, to identify support and resistance levels and to help determine when to enter or exit a trade.

Trading breakouts can be a popular strategy for traders seeking to capitalize on momentum and take advantage of potential price movements. However, breakouts can be unpredictable and false breakouts can occur, so traders should use proper risk management techniques and have a well-defined trading plan before entering a trade based on a range breakout.