Let’s make it simple
A football briefly rolls over a chalk boundary and then comes back. To describe the event correctly, you need to say when you looked. A still-forming candle can also change its appearance.
Understand the idea
A breakout describes price moving beyond a chosen boundary. For our paper exercises, we require a completed candle close beyond a marked zone. This is a practice definition, not the only definition used by traders.
A wick beyond a zone followed by a close inside it is different from a close outside it. Waiting for the close tells you the finished candle's position. It does not make the breakout a guaranteed success.
A later return inside the zone can challenge the breakout idea. Retests do not always happen, and some happen before further failure. Do not chase a sudden move because you feel you are missing out.
Read exact candle values
| Candle | Open | High | Low | Close |
|---|---|---|---|---|
| A | 14 | 16 | 13 | 15 |
| B | 15 | 17 | 14 | 16 |
A small worked example
Resistance is marked from 14.8 to 15.2. A candle reaches 16 but closes at 15.0: it closes inside the band. Another candle closes at 16.0: it closes above the band. Both could still be followed by a fall.
Your turn
Draw the resistance band. Make one candle with a wick above it and a close inside. Make another with a close above. Label the difference in a sentence.
Compare your exercise with a model response
First candle: high 16, close 15 inside the band. Second: close 16 above it. Later failure remains possible.
Pause & think
Check your understanding
Write an answer, then compare it with the explanation. This is self-study, not an automatically graded test.
Compare all three answers to unlock the review button.
Fictional examples. Education only; no pattern guarantees a result. Course information