Why the First Pullback After a Breakout Matters

After NQ breaks above a range, I don't automatically chase the move.

I watch the first pullback.

Does price return to the breakout area and hold? Does selling increase without pushing price much lower? Do buyers reappear as price attempts to recover?

Those clues can help distinguish a possible continuation from a failed breakout.

Of course, a pullback can fail too. That's why I define the invalidation level before entering instead of assuming the breakout must continue.