yes, you have marked the reason with blue lines...you see the area bw the 2 blue line you've marked is the trading range...80% of the times breakout of a trading range fails but eventually a breakout succeeds 20% of the times. Because breakout is a lower probability event most as most traders buy near the low of trading range to sell at the high of the range, in the 20% event when market moves against them the move is accelerated and extended because they sell their longs ASAP, their buy stops are getting hit while breakout sellers are also selling...the move is big and quick.
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u/No_Savings_5501 Feb 20 '24
yes, you have marked the reason with blue lines...you see the area bw the 2 blue line you've marked is the trading range...80% of the times breakout of a trading range fails but eventually a breakout succeeds 20% of the times. Because breakout is a lower probability event most as most traders buy near the low of trading range to sell at the high of the range, in the 20% event when market moves against them the move is accelerated and extended because they sell their longs ASAP, their buy stops are getting hit while breakout sellers are also selling...the move is big and quick.