A constructed falling sequence, an early bounce and a later break with a held retest. The follow-up quiz reuses this same example; neither shows a realized outcome.
Watch on YouTube ↗A green candle tells you price went up. It doesn't tell you the trend changed. During a decline, a recovery can feel strong while it remains below the area where the previous rally failed.
Start with the swings on the chart you are actually trading. In a falling sequence, rallies stop at lower highs and subsequent declines reach lower lows. A rise that stays within those references can be a bounce inside the existing decline. Its size in the last few minutes doesn't settle the wider question.
Compare the recovery with an existing high
The lesson shows a bounce from 100 while an earlier rally high at 112 remains overhead. The bounce stalls below that high and price makes another low. The downward sequence remains visible.
Some short sellers may have bought to take profit during the bounce. New buyers may have tried to catch a recovery. We can't tell which from the candles. What we can observe is that the rise didn't exceed the selected reference before selling made further progress.
That is a reason to keep the earlier bearish reading under review. It doesn't automatically supply a short entry at every green candle. An entry still needs its own conditions and a place where the idea would fail.
What changes after a break
Later, price closes above the earlier rally high. The recovery has now achieved something the first bounce didn't. Sellers who relied on that high face a move against them, and buyers have reached higher prices. One break can still fail, so this example waits for another observation.
Price returns to the broken level, dips below it and then closes back above. That completed recovery qualifies the buying entry under this lesson's rule. A touch by itself would leave the rule incomplete. If price stayed below the area, the case for buying would weaken.
Waiting has a cost. The entry can be higher, and a rally may continue without offering the return. The rule accepts those missed opportunities in exchange for seeing the response first. It doesn't guarantee that the completed response will keep working.
Connect the answer to the rule
The illustrated entry is 114, with a stop at 109 below the retest low and a planned target at an earlier high of 124. That gives 5 units of price risk and 10 units of possible reward before costs. The earlier high may attract selling; it is a possible destination, not an achieved result.
The lesson published October 22 and the follow-up "Would You Buy This Recovery?" quiz use the same constructed setup. They are one lesson presented as an explanation and a decision check, rather than two independent trade examples. "Buy" is the quiz answer under its break-and-retest rule. It doesn't predict the next candle or exclude every other valid method.
Both stop at the plan and supply no tested performance. A rising sequence on this chart can also sit inside a larger decline. Keep the timeframe and chosen swings consistent when deciding which observation would change your view. For a decline inside an existing rise, read the higher-low comparison.