Home » Breakdown


« Back to Glossary Index

Last Updated on: 13th February 2021, 09:12 am

A breakdown is a breakout to the downside. A breakdown happens when there is a breakout downward through support. The buyers who used to be at this level are gone, but there is still selling pressure.

Price trades sideways for a while but it is unable to garner the strength to move higher. When this happens, it signals buyer weakness.


The price that breaks downwards through a support level is expected to continue to fall. This is considered a sell signal. Especially if the volume is also increasing.

If the price has fallen significantly since the break, a better price can be achieved by waiting for a reaction back.

Please note that price in an uptrend often triggers false sell signals on breakdowns through support.

Monetary Policy

Monetary policy refers to the actions taken by a nation’s central bank to influence the availability and cost of money and credit to Read more

Kathy Lien

Kathy Lien is an expert in global currencies, author, and Managing Director of BK Asset Management. For retail FX traders back Read more

European Parliament

The European Parliament is the European Union’s law-making body. It is directly elected by EU voters every 5 years. It is a Read more

Open Position

An active trade that has yet to be closed.

« Back to Glossary Index