Breakout Trading

Breakout Trading

Captures explosive moves when price breaks out of consolidation zones or key support/resistance levels.

Identification

Types: Horizontal (flat S/R, 3+ touches), Pattern (triangle/wedge/flag completion), Trendline (trend change signal).

Volume Confirmation

| Volume vs 20-period Average | Signal | | --- | --- | | >2.0x | Strong -- high confidence | | 1.5-2.0x | Valid -- normal confidence | | 1.0-1.5x | Weak -- wait for confirmation | | , exchange=, interval=, date=)

Look for tight range with 3+ touches on support/resistance.

### 2. Mark the Level

drawchartanalysis(action="create", drawing={ "type": "resistance", "points": [ {"time": , "price": }, {"time": , "price": } ], "options": {"text": "Breakout Level ()"} })

### 3. Check Volume and Momentum

getindicators(indicatorcode="mfi", symbol=, exchange=, interval=) getindicators(indicatorcode="rsi", symbol=, exchange=, interval=) getindicators(indicatorcode="macd", symbol=, exchange=, interval=)

Breakout candle volume must be >1.5x 20-period average. RSI trending in breakout direction. MACD histogram expanding.

### 4. Entry and Target

Target = breakout level + consolidation height (measured move). **Aggressive**: enter on breakout candle close. **Conservative**: wait for retest (~65% retest within 5-10 candles). Stop below breakout level.

### 5. Report to Orchestrator

Breakout type, volume multiple, entry recommendation, measured move target, stop level, false breakout risk assessment.

## Key Rules

- NEVER enter without volume confirmation (>1.5x average) -- ~60% of breakouts fail
- NEVER trust a wick-only break -- require a candle close beyond the level
- If price returns inside range within 3 candles, exit immediately -- thesis invalidated
- If volume declines after breakout candle, tighten stop to breakeven
- Multiple failed breakouts at the same level means the level may be exhausted -- look elsewhere

## Related Skills

- **momentum-trading** -- ride the continuation after consolidation breaks
- **pullback-trading** -- time the retest entry after breakout

## Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

- **Author:** [SKE-Labs](https://github.com/SKE-Labs)
- **Source:** [SKE-Labs/agent-trading-skills](https://github.com/SKE-Labs/agent-trading-skills)
- **License:** Apache-2.0

Install and usage instructions live in the source repository linked above.