Investopedia

Continue to Site »

Failed Break

Filed Under » , , ,
Dictionary Says

Definition of 'Failed Break'

A price movement through an identified level of support or resistance that does not have enough momentum to maintain its direction. Since the validity of the breakout (or breakdown) is compromised, many traders close their positions and the price fails to make the sharp move that many were expecting.

A failed break is also commonly referred to as a "false breakout".

Failed Break
Investopedia Says

Investopedia explains 'Failed Break'

As you can see from the chart above, technical traders who identified the descending triangle would expect a substantial move lower once the price was able to break below the $21.50 support. However, in the event of a failed break, the move lower would not occur and many traders would be forced to realize a significant loss. Many technical traders will use other technical indicators to confirm that the breakout is valid and that the momentum will likely continue.

Articles Of Interest

  1.

    Trading Failed Breaks

    Learn how to capitalize on the predictable behavior of others during breakouts and breakdowns.

  2. Spotting Breakouts As Easy As ACD

    Wondering what it means to be a "logical trader"? Take a look at this system devised by Mark Fisher.

  3. Gauging Support And Resistance With Price By Volume

    This straightforward histogram can help you analyze the buying and selling interest in a stock.

  4. Trade Broken Trendlines Without Going Broke

    Learn a stop-loss strategy that will help you protect your gains when trading breaks.

  5. Market Summary For May 17, 2013

    The U.S. stock markets moved sharply higher this week, on track for its fourth straight week of gains, driven by ongoing improvements in economic indicators.

  6. Parabolic SAR Buy Signals

    The Parabolic SAR indicator is flashing "buy" in these four diverse stocks. Not simply relying on one indicator though, I take a look at the overall technical outlook and determine which ones ...

  7. Market Summary for May 10 2013

    Major U.S. indices moved higher this week but, given the new highs, traders should watch for retracements next week.

  8. Buying The Upward Trend Channel Bounce

    Find out how to set up the trades for four stocks that are moving higher within well-defined trend channels.

  9. Market Summary for May 3 2013

    The U.S. stock market extended its rally higher this week, led by technology stocks and lagged by small-cap stocks. Traders should be watching a number of other reports due out next week.

  10. Trading Is Timing

    Learn how to make gains even if you don't get in at the right time.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  2. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  3. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  4. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  5. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.

  6. Consequential Loss

    The amount of loss incurred as a result of being unable to use business property or equipment.
Trading Center