Seeing a large bullish candle, many people’s first reaction is to chase.
But in my system, a breakout itself does not mean it is time to buy.
First, look at false breakouts.
They can also surge past the previous high, even forming a large bullish candle.
But they cannot hold above the previous high and soon fall back into the original range.
This indicates that the selling pressure above has not been absorbed.
The first surge may simply be a test, or it may be a hard push by short-term funds.
Without a second leg, the buyers’ sustained strength has not been confirmed.
As the price moves higher