What is breakout?

What it means

The premise is that a level holding price back represents resting orders, and once those are consumed there is little immediate resistance to further movement. When it works, the move that follows is fast, which is why breakout strategies tend to have low win rates and large average wins.

Why it matters

They also have a characteristic failure mode. Levels attract orders precisely because they are obvious, which makes them the ideal place to trigger stops before reversing — the false breakout. On liquid instruments a majority of clean breaks fail.

What this changes in practice

The filters that separate the two are mostly about context rather than the break itself: whether the move is aligned with the higher timeframe, whether the range preceding it was compressed, and what time of day it happened. Our surviving breakout strategy, SESSION-ORB, keys on session structure for exactly this reason — the edge is in when, not just where.