GlossaryLevel 7
The evidence trio
The evidence trio is the set of three questions asked of any breakout: the close, the volume and the retest. Did price CLOSE beyond the zone, or did only a wick poke through? Did breakout volume clearly expand compared with the quiet of the preceding compression? And when price returned to test the broken boundary, did that boundary play its new role — the role reversal of level 3? The trio is assembled in level 4 around breakout volume, becomes the pattern referee in level 7, and does exactly the same job at a neckline break in level 8. On a chart the application is sequential: look at the close first, then compare the volume bar under the breakout candle with the bars before it, then watch whether the retest holds. The common misreading is to take three "yes" answers for a promise; even a retest that holds only adds weight to the scale of evidence, it never settles the outcome. Seeing the shape is the easy part; the discipline is refusing to declare an outcome before the trio arrives, however handsome the shape. For risk literacy the trio is the antidote to putting the story ahead of the evidence.
This content is educational information, not personalised investment advice. The chart examples are illustrative.