Lesson 05: Breakouts

The first 30 minutes after the market opens often set the tone for the day. Traders mark the high and low of this period to form the 30-minute box, a simple range that shows the first real battle between buyers and sellers. The top of the box acts as resistance and the bottom acts as support. Many intraday trends begin the moment price finally leaves this range.

A breakout happens when price moves outside the box. What matters most is not the wick, but the candle body closes outside the box. A close above the 30-minute high signals that buyers were strong enough to hold price beyond resistance, and sellers could not push it back inside. This shift often triggers momentum and opens the door for a trend to develop.

Once a candle closes above the top of the box, the old resistance commonly becomes new support. This is the classic support-resistance flip. Traders who shorted at resistance get trapped and are forced to buy back. Breakout traders add positions. Dip buyers step in on the retest. Together, this creates fresh demand at the breakout level, causing price to bounce when it pulls back.

Most traders approach this setup in one of two ways: entering on the candle close above the box, or waiting for the retest of the breakout level and entering when it holds as support. Either way, the logic is the same. The first 30-minute range shows the early balance of power, and the breakout marks the moment the market picks a side.