Glossary

Breakout

When a price rises above a level it couldn't get past before, such as its highest point of the last 20 or 60 days.

In plain English

Breakout traders buy when a stock pushes to a new high, hoping the move has just started. The classic advice: only trust breakouts that happen on heavy volume.

Uncle Gary explains

Kevin finally beats Uncle Gary at table tennis after four years of trying. Breakout! Gary claims his back was hurting. The rematch will decide whether it was a real breakout or a false one.

Why it matters for your money

In our test, breakouts on heavy volume did no better than breakouts on quiet volume, across 36,000 to 52,000 loud ones and over 100,000 quiet ones.

Where we tested it

Related terms

All glossary terms. Educational content, not financial advice.