Price Action: How to Understand Breakout Tests (Part 1)

Price Action: How to Understand Breakout Tests (Part 1) Every fluctuation in the market is a test of a key price level. After a breakout occurs, why does the market almost always return to test that breakout? This is because any breakout represents price temporarily departing from the original equilibrium zone, and the market naturally wants to verify whether the breakout is genuine and valid. In other words, every breakout is essentially a "hypothesis test," and the market confirms through subsequent retest behavior whether the breakout can hold. In Price Action logic, there is a very important inference: Test Success = Trend Resumption = A Failed Reversal = Pullback Test Failure = New Breakout = A Reversal is a Failed Test, it's also a New Breakout. That is to say, if the test succeeds, the market resumes the original trend, and the failed reversal is essentially just a pullback; if the test fails, then it is itself a new breakout — a reversal is actually a failed test, and every rev