The Breakout State Machine
A breakout is not an event, it is a sequence — and most losses come from acting as though a state licenses something it does not. Click through the states to see what each one actually permits.
The rule the whole machine exists to enforce. Armed is not entry, and impulse is not validity. Those two confusions account for most of what traders call a "fake breakout loss" — the trade was taken at a state that permitted watching, not buying, or it was held at a state that permitted harvesting, not conviction. Measurements shown are from 489 compression breakouts across 490 SPY sessions.