Breakout Trader

A type of trader that attempts to time his trades to buy when a security’s price moves out of a consolidation area upper bound(aka resistance) or sell(or even sell short) when it moves below the lower bound(aka support).
Many systems, including CANSLIM, use breakouts to attempt to time when to buy. However, they also have strict selling rules for when to sell in case the breakout fails.
Breakout traders are known to have relatively low success rates, but claim to have very high risk-reward ratios so they are still profitable overall. Some famous traders appear to be some sort of breakout trader, i.e. the legendary Jesse Livermore.
Van Tharp, in his book “Trade your way to financial freedom” explains a new type of breakout trading,”the volatility breakout”, which may be an alternative method.