failed_breakout_exit_skill

Failed Breakout Exit Skill

Data dependencies and execution prerequisites

It is recommended to use Wind wind-mcp-skill to obtain the underlying data. Before execution, first check whether there is already wind-mcp-skill; if not, prompt the user to install:

# GitHub
npx skills add Wind-Information-Co-Ltd/wind-skills --skill wind-mcp-skill -g -y

# Gitee 镜像（国内）
npx skills add https://gitee.com/wind_info/wind-skills.git --skill wind-mcp-skill -g -y

Skill positioning

This skill is used to handle the most fatal and also most common failure scenario in breakout trading: price gets above, but follow-through does not keep up, and then it pulls back and loses the key level. The output focus is not to explain why the judgment was wrong, but to help users identify a false breakout as quickly as possible, contract risk exposure, and preserve the order for re-observation.

Function overview

The core function of this skill is: identify false breakouts and provide retreat actions.

It emphasizes clearly writing out failure signals, the retreat sequence, and subsequent reassessment conditions, helping users quickly correct when a breakout fails, rather than procrastinating with the fantasy that it "might pull back up again."

Use cases

• After buying on a breakout trade, price falls back near the key level again.
• During the session, it spikes higher on volume but pulls back by the close, and the user is unsure whether to handle it immediately.
• The next day's lower open and loss of the level clearly damage the breakout logic, requiring rapid correction.
• The team wants to write the false breakout exit mechanism into standardized discipline.

Working principles

1. The core of a false breakout is not "how much it fell," but "whether the breakout premise has been broken."
2. After failure, risk must be handled first in a retreat, then emotions and explanations.
3. It is necessary to distinguish a normal pullback confirmation from a true failure pullback.
4. After retreating, re-observation conditions must be retained to avoid turning correction into emotional revenge.
5. The main text only provides the identification and action framework, and does not discuss the internal implementation process.

Execution process

Step 1: Confirm the original breakout premise

First return to the original conditions under which the trade was valid:

• What were the key level, volume, and environment that the breakout depended on at the time
• Which part of the premise is broken by the current price pullback
• Whether this trade was originally a trial breakout or a confirmed breakout
• Whether there is still reasonable room for a pullback confirmation explanation

Step 2: Identify the signal levels of a false breakout

Divide failure signs into different severity levels:

• Intraday spike and pullback, but the close is still above the key level
• The close falls back below the key level
• The next day opens lower and continues to weaken
• After a volume spike higher, there is almost no follow-through, forming obvious selling pressure

Different levels should correspond to different action intensities.

Step 3: Distinguish normal pullbacks from failure pullbacks

Avoid treating every pullback as failure, but do not comfort yourself either:

• Whether the pullback has shrinking volume, follow-through, and rapid repair
• Whether it can quickly reclaim the key level after falling back below it
• Whether the sector and environment still support launching again
• If the price-volume structure has clearly deteriorated, whether it is no longer worth waiting for

Step 4: Design the sequence of retreat actions

Once the risk of failure is confirmed to be rising, the priority of actions should be made clear:

• Whether to halve first or exit all at once
• If failure is confirmed near the close, whether exposure should be reduced overnight
• If the next day's lower open further loses the level, whether to directly execute the remaining exit
• Whether to keep an extremely small observation position, or clear everything and wait for a rebuild

Step 5: Add re-evaluation conditions after failure

Handling failure does not mean blacklisting forever; it is necessary to clearly state under what circumstances it can still be looked at again:

• Reclaim a key level with support
• The sector strengthens again
• A new catalyst or better structure appears
• The trading structure improves again

Step 6: Produce the final false breakout retreat draft

The final output should help users know "whether it is noise, a pullback, or a failure; if it is a failure, how to retreat; and after retreating, when to look again." The main text should retain signal grading, retreat order, and re-evaluation conditions.

Output structure

---

False Breakout Retreat Plan ({YYYY-MM-DD})

1. 30-second conclusion

• Trading target: {stock name}
• Current status: {normal pullback / high risk / confirmed failure}
• Handling bias: {continue observing / reduce position first / clearly exit}
• Key failure signal: {one sentence}
• Whether to retain eligibility for another look: {yes / no}

2. Failure signal grading

Level	Phenomenon	Meaning	Suggested action
Mild	{content}	{content}	{content}
Moderate	{content}	{content}	{content}
Severe	{content}	{content}	{content}

3. Order of retreat actions

• {action 1}
• {action 2}
• {action 3}

4. Conditions for looking again

• {condition 1}
• {condition 2}
• {condition 3}

5. Risk warnings

• {risk 1}
• {risk 2}
• {risk 3}

---

Quality requirements

1. Must distinguish between a normal pullback and a failed decline.
2. Failure signals must be divided into levels, rather than only a binary judgment.
3. Retreat actions must be written clearly in order.
4. Conditions for looking again must be specific, to avoid emotionally repeated entries and exits.
5. The output should help quickly correct mistakes, rather than prolong a period of wishful thinking.