Breakout guide
How to Tell a Real Breakout From a Fakeout
A breakout is more than price briefly crossing a line. The useful question is whether the market accepts prices beyond the boundary—and whether participation supports that acceptance.
Start with acceptance, not the wick
A wick beyond resistance or support only proves that price traded there. A credible breakout usually shows continued trade outside the prior range, closes that preserve displacement, or a retest that holds the breached boundary.
Inspect the participation
Volume expansion can show that the move attracted meaningful activity. CVD can show whether aggressive flow aligned with the breach. Open interest adds context: rapid leverage growth without spot confirmation can make a move more fragile.
- Did price hold outside the range?
- Did volume expand relative to recent conditions?
- Did aggressive order flow support the direction?
- Did a retest defend the old boundary?
- Was the move spot-supported or mainly leverage-driven?
Why checklists beat labels
Real-time markets rarely divide neatly into “real” and “fake.” Evidence accumulates, conflicts and changes. WarRoom treats breakout classification as an explainable set of observations so traders can see what confirms the breach and what weakens it.