Reversal breakouts

  1. Consolidation After a Trend:

    • Similar to continuation breakouts, there’s a pause or consolidation after a prolonged trend.

    • Buyers and sellers catch their breath.

  1. Reversal Decision:

    • Traders collectively decide that the trend has exhausted itself.

    • They push the price in the opposite (reverse) direction.

  2. Result: A “reversal breakout” occurs.

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