InvestorQ : How important are breakouts when it comes to technical analysis and trading?
shrinidhi Rajan made post

How important are breakouts when it comes to technical analysis and trading?

Answer
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Riya Dwivedi answered.
1 year ago


Breakouts are extremely important because for traders it gives them an idea as to which direction they should bet towards. A break out can happen in two ways! Either you can have a break out which reinforces an uptrend or a down trend. Alternatively, you can have a break out which negates the current trend. In both the cases, the break out helps you to take a firmer decision and also commits greater trading capital and risk to that particular position or view in the market. We talked about a lot in this article, but we barely scratched the surface of technical analysis! As you practice trading, you will learn how to combine these concepts and turn them into practical and useful trading strategies. The crux of the story is that you need to stay tuned as we dive deeper into each of the concepts. Breakouts are at the core of making big money through charts and that is something every trader and chartist must understand to the fullest.