If the price successfully retests the support or resistance level and bounces off it, this confirms that the level is valid and that it can be used as a trading signal.
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However, it is important to note that not all breaks and retests are successful. Sometimes, the price may break through a resistance level and then immediately retrace back to the level without giving traders an opportunity to enter the market. This is known as a false break and can result in losses for traders who enter the market too early.
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However, it is important to note that not all breaks and retests are successful. Sometimes, the price may break through a resistance level and then immediately retrace back to the level without giving traders an opportunity to enter the market. This is known as a false break and can result in losses for traders who enter the market too early.
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