Reaction vs Break

A reaction is when price approaches a level and reverses — buyers step in at support or sellers at resistance. A break is when price moves through the level and holds on the other side, often retesting it from above or below.

Reactions show deceleration: candles get smaller as price nears the level, wicks form into the zone, and momentum candles fade. Breaks show acceleration: large candles close beyond the zone, volume often expands (if available), and pullbacks to the level are shallow.

False breaks trap traders. Price pokes through support or resistance with a wick, triggers stops, then reverses hard. Manual traders wait for a candle close beyond the zone on their decision timeframe before treating a level as broken. Wicks are probes; closes are commitments.

The third touch rule is a guideline, not a law: levels often hold on the first two tests and break on the third as liquidity is exhausted. Combine touch count with candle behavior — a weak third test with shrinking bodies is more likely to break than a sharp rejection with long wicks.

Your trade plan should specify whether you are playing a reaction or a break. Mixing the two leads to inconsistent stops: reaction trades need stops beyond the zone; break trades need stops back inside the zone if the break fails.