breakout vs reversal

Breakouts are either continuations with the prevailing trend or from a range into a new trend. Reversals can only be against a prevailing trend. It follows that breakouts occur more frequently - on some scale, breakouts occur every 3 or 4 bars of a trend, whereas a reversal can only occur once.

The distance each can travel varies. All trends fail at some point so there is a limit to the number of breakouts with exceptional travel.

The reliability of each pattern is also different. Many reversals fail and set up a trap for the trader. In a consistent and well established trend, most continuation signals will succeed.
 
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