#12 Failed Breakouts in Order Flow

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What Is a Failed Breakout?​

A failed breakout happens when:

• Price moves above or below an important level
• But cannot continue
• And returns back into the previous area

From an order-flow perspective, this means:

• Initial strength appears
• But it does not sustain

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How Breakouts Start​

Breakouts usually begin with:

• Increased market orders
• One side becoming aggressive
• Temporary imbalance

This pushes price beyond a level, but continuation is not guaranteed.

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Why Breakouts Fail (Order Flow View)​

A breakout fails when:

• The aggressive side loses strength
• The opposite side provides enough liquidity
• Price cannot trade comfortably at the new level

This often results in:

• Price stalling
• Then reversing back

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Order Flow Clues of Failure​

Beginner-level clues include:

• High volume near the breakout price
• Very little further price movement
• Price quickly returning inside the range

This shows:

• Trading happened
• But the market did not accept the new price area

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Acceptance vs Rejection​

• Acceptance: price trades and stays above or below the level
• Rejection: price trades briefly and moves back

Volume at price helps identify this:

• Sustained trading = acceptance
• Brief trading + return = rejection

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Beginner Tip​

Do not assume every breakout will continue.

Always observe:

• Does price hold above or below the level?
• Or does it quickly return?

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#11 Absorption and Sweeps On the DOM!

#13 Stop Orders and Stop Runs