Breakouts and false breakouts

When price closes beyond a support or resistance zone, that is a breakout — the same logic as the trendline break in level 2. But not every breakout holds: if price pushes beyond the zone and snaps back inside shortly after, that is a false breakout. False breakouts are among the traps that catch beginners most often.

To tell genuine from false, you accumulate evidence: did the break happen on a wick or on a close? Did price manage to stay beyond the zone, or did it slip straight back inside? Did a retest hold? One candle poking through is weak evidence; consecutive closes beyond the zone and a retest that holds multiply it.

Proceed knowing this: no method can flawlessly identify a false breakout in advance. Evidence only accumulates with time and never reaches certainty — acting early means being fast but often wrong, waiting means being late but more accurate. That trade-off is the nature of markets; no tool in this course, or anywhere else, removes it.