When you analyze the charts, you use the term “breakout” pretty often. I would appreciate if you could elaborate on what it precisely means. Thank you.
A breakout is when price moves above the previous high or another important resistance level. A confirmed breakout would be a breakout that takes place on a huge volume, or when the price consolidates above the pertinent resistance level for a few days / weeks (we usually want the price to stay above a given level for 3 consecutive trading days). Whether we take days or weeks into account depends on the perspective we use. When making short-term calls, 3 days of consolidation would be sufficient, but from a long-term perspective, say 6 months, a few days of consolidation might not be enough for the breakout to be confirmed.
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