Sweep or Real Breakout? The 3-Candle Rule
A simple rule for telling a fake breakout from a real one, useful for traders who keep getting trapped at key levels.
- When price pokes above resistance and snaps straight back down, that is a sweep, not a breakout.
- The tell is a long wick with a fast move back below the level, usually within one to three candles.
- A real breakout holds: wait for three candles in a row to close above the level before trusting it.
- A sweep is just a pause that refuels the old range; a hold is the start of a new trend.
Outlook: The test at any broken level stays the same — did price close and hold, or did it stab and come back home.