A Forex Rapid Rebate rebateforex a significant change ForexRapidRebate rebateforexbroker direction A breakout is classically defined as a price breakout above a support/resistance line (including triangles, flags rebateforexfee triangular flags), but breakouts can also be defined in newer and more exotic ways, such as breaking through Bollinger Bands, ATR or linear regression line channels and special curves such as long engulfing candlesticks and key reversal curves A breakout is usually a breakout cashback forex occurs in the opposite direction of an existing trend Although breakouts sometimes sneak up on key price levels and linger rather than break strongly through them, almost all traders watch breakouts closely, even long term traders. -It is not difficult to understand why breakouts occur mainly because of a change in market sentiment towards the currency. When the price penetrates the breakout point to the downside, you understand that the breakout has failed and the price has hit a new low. As you can see in the chart below, the second breakout has not yet failed. It is amazing how often the resistance lines tend to be parallel, perhaps reflecting the fact that each currency has its own momentum habits. The slope of the resistance line differs between the first breakout (1) and the second breakout (2) Breakouts are usually caused by important news or events that can change market sentiment, such as an unexpected central bank decision to raise interest rates The chart below shows the price chart of NZD/USD in June 2014 The consensus among analysts was "no rate hike", but the central bank decision Five days before the meeting, traders were still buying NZD. We can see this as a "just in case" position and on the first day, the NZD closed above the resistance line and made a good profit on the day the decision was announced. It goes without saying that trading against the consensus of opinion does not always work and the move is not yet complete. As of the date of the chart, we are still not sure if the NZD will continue to rise and the breakout appears to be stronger and has recovered 75% of the previous decline, but it could still die down. -As the previous price curve shows, those who bet on a rate hike are taking profits, thus temporarily stopping the upside move. It is also possible that some participants are trying to steer prices to a certain level so that they can buy at a lower price or sell at a higher price. When you are trying to align fundamentals with a chart breakout and are not sure why, you have to decide whether to follow the fundamentals or trust the charts. If you wait until the breakout is verified, you may experience losses, as a large part of the gain comes from verifying the breakout during the breakout process, which is a more complicated matter. A correct rule is that a breakout is accurate if the price reaches and crosses the previous high or low. The following USD/CAD chart shows that the red resistance line was broken to the upside, but then the price failed to make a higher close (the uppermost gold line). This is usually a sign of a failed breakout to the upside, but in reality, until the price after the breakout makes a new low (the middle gold line), another more effective way to test for a failed breakout is to watch for a lower low on the USD/CAD daily chart than the pre-breakout low (the bottom gold line), but a failed close. If you dont understand technical analysis, breakouts can be a hindrance because they can be very confusing. When a large number of traders take profits, breakouts tend to be followed by weakness and then the trend resumes the previous breakout and retreat, so you need to master both ideas