Part II. Trading Breakouts. Commander in Pips: Ok, let’s start with types of breakouts. It’s obvious that we can point to just two types of breakouts – continuation and reversal. Depending on the type of breakout that you see currently on the market will help you to better understand the big picture of the market, since any real breakout shows a strong change in demand and supply of a particular currency and could lead to an extensive move in one or the other direction. An extensive move, in turn, is a great opportunity for trading. Continuation Breakout We already know that the market does not just move and move continuously in some direction. From time to time it takes some pauses, that we call “retracements”. Retracements could be different as in term of time as in shape. It could take a shape of smallest flags & pennants, triangles, rectangles, sideways consolidations etc. But for terms of breakouts, more suitable are consolidations that last for some extended time. Otherwise the fact of breakout looks unclear.