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False Breakthroughs

A false breakthrough is when the chart goes beyond the support and resistance levels but then returns to the price channel.

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Look carefully at the chart to distinguish a false breakthrough from a real one.

If the candlestick closes below the support level or above the resistance level so that approximately ¾ of its body is outside of the price channel, then the breakthrough is real.

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If the candlestick closes below the support level or above the resistance level so that less than ¾ of its body is outside of the price channel, then the breakthrough is false.

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