Breakout Candles Decoded a Complete AnatomyTesla, Inc.BATS:TSLAAMIT-RAJANHello traders, This is mine first educational idea of 2026, and I wanted to start the year by sharing a concept that looks simple on charts but is deeply misunderstood in real trading and why every breakout is meant to be chased some are meant to be trusted, some avoided, and some waited upon and why Some Breakouts Fly and others fail? Let's decode that! So most traders focus on whether a breakout happened. Professional traders focus on how the breakout happened ? In this publication we’ll break down three very common breakout candle behaviors near resistance, what they actually indicate, and how you can align your entries with probability instead of emotion. First, a Quick Truth About Breakouts-: A horizontal resistance level is not broken by price alone. It is broken by acceptance. Acceptance means? * Price spends time above the level * Market participants agree on higher value * Pullbacks hold above the level With that in mind, let’s decode the candles! Type 1: The Ideal / Balanced Breakout Candle Structure-: Breaks above resistance Candle body is clean and balanced Close is comfortably above the level No extreme extension What it tells us? This is a sign of healthy participation, not panic buying. Buyers are stepping in gradually, allowing price to build acceptance above resistance. High probability outcome-: Continuation without deep pullback Why this works? Late sellers get trapped, No urgency from buyers (no FOMO), Institutions are comfortable holding above the level and This is the breakout most traders should look to trade. Type 2: Weak Breakout / Overlapping Candle (Fakeout Zone) Structure: Price crosses resistance but struggles Candle overlaps the level heavily Wicks on both sides Close is near the level, not above it What it tells us? This shows indecision and lack of acceptance and The market tested higher prices but failed to attract enough commitment. High probability outcome-: False breakout (fakeout) Range continuation or reversal Why this fails? Buyers lack conviction, Sellers are still active at resistance, Breakout traders get trapped quickly and The best trade here is often NO trade here. Type 3: Powerful Impulsive Breakout Candle (Retest Candidate) Structure: Large, wide-range candle Strong momentum through resistance Little to no overlap with the level Often accompanied by volume expansion What it tells us? This is a momentum breakout, driven by urgency. Stops get triggered, breakout traders pile in, and price moves fast and the common mistake most traders chase this candle. High probability outcome-: Pullback / retest of the breakout level Re-accumulation before continuation Why retests happen? Early buyers book partial profits, Late buyers get trapped, Smart money looks for cheaper re-entry and The best trade is usually on the retest, not the breakout candle itself. The Key Insight (Most Important Part) The strongest-looking breakout candle is not always the best entry. Moderate, well-accepted breakouts- smooth continuation Weak breakouts- fakeouts Very strong breakouts- retests first Understanding this single idea can: Reduce FOMO trades Improve entry timing Improve risk–reward dramatically When Trade? acceptance breakouts immediately. When Avoid? overlapping breakouts. When Wait for? retest after impulsive breakouts. Final Thoughts-:Charts speak a language, Candles are words and structure is the grammar. Once you stop chasing every breakout and start reading the story behind the candle, your trading automatically becomes calmer, cleaner, and more consistent. Hope this idea added value to your trading. Wishing you all clarity, discipline, and consistency in the markets ahead. Happy Trading Regards- Amit.