From Traderpedia

Definition: Used to describe when a security rises above or falls below a particular level, generally it's previous high or low point.

A breakout strategy is designed to catch a new trend which often forms after consolidation. A typical example would be a breakout from a range, if a particular stock was trading between $10 and $20 and had bounced off these levels a couple of times. then a trader may place an order at $20.01 to buy and $9.99 to sell (in practice the margin between the support and resistance and the orders would probably be larger to avoid a false signal) and as the market "breaks out" of the range one of the orders would be triggered and the aim would be to catch the trend in this direction. Breakouts are not only concerned with channels, the breakout can be "above yesturdays high", "above or below the opening range" and many other alternatives.

For more help in determining some intial patterns the preclude a breakout see Ross Hook or 123 pattern or 1-2-3 formation you may find that if coding your concepts of the Breakout that theses patterns have many common elements.--Albruno 15:03, 10 June 2007 (BST)