Broken resistance and long positions: turning a breakout into a testable rule

From a local high to confirmed resistance

The existing support-and-resistance guide explains the general definition and uses of resistance. In this study, the model identifies local highs relative to surrounding candles and groups nearby highs into an average resistance level.

A resistance becomes available to trade two four-hour candles, or eight hours, after its high. The high’s timestamp is not the moment the strategy can use it. The exact grouping tolerance and full neighborhood configuration are not supplied.

What is broken resistance and how is it detected?

Here, broken resistance means the first completed four-hour candle that closes above an already confirmed level. Trading above the level during a candle does not suffice if the candle closes below it.

This definition turns a visual breakout into an event that can be studied consistently. It does not prove that price must keep rising. A subsequent close below the broken resistance is the stop condition for a long still open in this model.

What is a long and what determines its result?

A long position benefits from an exit price above its entry and loses from an exit below it. The supplied report expresses its price result as (exit − entry) / entry, in percentage terms, before excluded costs.

Understanding a long helps distinguish an expectation of a rise from the measured result after applying entry and exit rules. The study simulates positions using perpetual-futures prices. It does not establish real executions or specify account margin, leverage or order settings for a live implementation.

How the supplied model opens a long

After resistance is confirmed, the model waits for a close above it and selects the lowest active resistance above that prospective entry. Its target is 0.25% below the selected higher resistance. The long is accepted at the breakout candle’s close only if the target is at least 0.25% above entry.

A target that is too close, or the absence of a higher resistance, prevents entry. The model allows one long per resistance; a later recovery of the same level does not open another. Different resistances broken in the same candle can nevertheless produce overlapping positions.

Fixed target and a stop decided at the close

The target is fixed at entry. Resistance levels from the preceding 90 days may serve as targets but do not trigger their own longs in this study. A new, closer resistance or a later change in a grouped level does not move an existing target.

The simulation counts a fill when a candle’s high reaches the target and checks that before the stop. If no target is reached, the first close below the broken resistance exits at that close. This rule differs from an intrabar stop order at the resistance price.

What this information can help you evaluate

These definitions separate level detection, entry eligibility and exits. They make it possible to identify rejected breakouts and understand the supplied model’s results without treating every broken resistance as an automatic trade.

The linked example contains 141 longs over one 365-day window. Overlapping trades, excluded commissions, funding and slippage, and assumed target fills limit interpretation. Summed trade percentages are not a funded-portfolio return. Historical similarity does not guarantee the same future outcome.

Application and source

Bitcoin resistance breaks: 141 simulated longs sum to +28.31%.

Definitions from the RavenInvestor report dated October 29, 2026 at 00:49 UTC and its original chart. Declared data source: Binance BTCUSDT aggTrades.

Educational financial information, not personalized investment advice or a recommendation to open a long. Simulated historical results do not guarantee future results.