Highs, lows and breakouts
- Lesson 3 of 3
- Basics
- steps
- 7
- metrics taught
- 3
- Template
- Breakout
- Your test
- Not taken yet
About this lesson
What you'll learn
Where the last candle and the last day topped out, how bots spot a close beyond those levels, and why a breakout needs volume behind it.
The previous candle's high and low
Previous high is the highest price of the last finished candle, and previous low is its lowest. They're simple reference lines for the candle that's forming now.
Move through the candles. The shaded one is the previous candle, and the dot shows where the current one closes.
Closing beyond the previous candle
A close above the previous high means buyers pushed past where the last candle topped out. A close below the previous low is the same on the way down.
The bot builder has candle conditions for exactly these: close above previous high and close below previous low. Press play and count how often each happens.
The previous day's high
On a 1d timeframe, the previous high is yesterday's high. Many traders watch it, so a close above it gets noticed.
The Breakout template uses exactly that: price above the previous day's high, with volume at least 2× its average.
Price range: how far it traveled
Price range measures the distance between the highest and lowest price in a window: (high − low) ÷ low, in percent.
It says how much the market moved, whatever the direction. Change the window and watch the range grow.
Breakouts without a crowd
A price can poke above a level on a handful of trades and fall straight back. That's often called a false breakout.
Volume helps tell them apart: a breakout with heavy volume has many traders behind it. Compare the same breakout with and without them.
Your turn: the Breakout template
This is five days of hourly candles. The Breakout template fires when the price is above the previous day's high and hourly volume is at least 2× its recent average.
Move the volume multiple and count the Signals. Under the chart, the price condition runs on the live feed.
Test what you learned
Three quick questions, then a bot to build.
Read the strategy and set up a bot that follows it, with the direction and the conditions it names and no others. The strategy also uses relative volume, from the volume lesson. Passing depends on the build alone. Once it's right, the bot fires and you see what the market did next, which won't always go your way.
These lessons explain what each number measures. They are not trading advice, and the lesson charts use simulated data. Preview build: market data on this site is simulated.