Breakout trading is a strategy that involves entering a position when the price of an asset breaks above a resistance level or below a support level, signaling a potential continuation of the trend. Traders often look for significant volume accompanying the breakout to confirm the movement's validity, as this can indicate strong buyer or seller interest. Stop-loss orders are commonly placed just inside the previous range to manage risk, while profit targets may be determined based on previous price patterns or volatility measurements. Successful breakout trading requires careful analysis of price action and market conditions to minimize false signals.