Breakouts occur in all types of market environments.
Typically, the most explosive price movements are a result of channel breakouts and price pattern breakouts such as triangles, flags, or head and shoulders patterns. As volatility contracts during these time frames, it will typically expand after prices move beyond the identified ranges.
Regardless of the timeframe, breakout trading is a great strategy. You can apply this strategy to day trading, swing trading, or any style of trading.
Retests can occur on a variety of price action patterns. In fact it’s important to always wait for a retest of the broken level. This involves waiting for the retest as well as confirming price action before putting any capital at risk.
