Being a trader requires everyone involved in trading activities to understand the various terms used in the trading world. One of the terms that will often be heard is “Breakout and Bounce”.

A breakout is when the price of an asset moves above an area of resistance or moves below an area of support. A breakout indicates the potential for the price to start following the trend in the direction of the breakout.

Bounce is when the price bounces after approaching the Support or Resistance boundary. Unlike a Breakout, a Bounce signals weakness in the continuity of the current price trend.