Typically False Breakouts dont go higher than 5% from the breakout point. Here is a perfect example of price breaking the neckline, rising less than 5% and returning below the breakout point. Price action has formed a head and shoulder pattern with RSI bearish divergence on the neckline.
Hmm, do you mind me asking where you got the information that false breakouts dont go higher than 5%?
ArtofJR
⋅
@deliciouspodo, Hey there, I came across the 5% rule in Bulkowski's Encyclopedia of Chart Patterns book 2nd edition. He mentions them throughout every pattern where the failed breakouts didnt rise higher than 5%.
deliciouspodo
⋅
@jrghost, Thank you so much bud. I've heard of Bulkowski.
Still, it's a great example.
ArtofJR
⋅
@deliciouspodo, But this is the 1 hour chart so it may not be a good example.