What a break says — and what it does not

When price closes on the other side of a trendline, that is called a break. The traditional reading is this: the rhythm of the trend has been disturbed, and the existing order is not as strong as it was. Notice what that sentence does not say — it does not say the trend has reversed.

After a break, all three scenarios remain possible: the trend may reverse, the market may turn sideways, or price may resume its old direction after a short pause. Experienced chart readers therefore treat a break as a warning, not a conclusion. Remember, too, the difference between a wick poking through and a close beyond the line: the close is the period's final verdict and carries more weight.

Here you see level 1's lesson continued: a single event — one candle, one break — is never the whole story. After a break, watch whether the sequence of highs and lows actually changes. If the market keeps printing higher highs and higher lows, the trend's definition is still intact even though the line has been broken.