All lessons
SOS and LPS: strength, then a test
The breakout gets attention. The quiet return asks the harder question.
Relate a sign of strength to a later last point of support.
SOS describes improving upward progress, often with wider bars and higher volume. Its position within the trading range matters.
LPS describes a reaction appearing to hold support after strength. Reduced downward ranges and volume can support that reading; not every dip qualifies.
Waiting for a reaction may shorten distance to logical invalidation. But price may never retest; chasing that missed move changes the plan.
A deep return into the range or failure to regain the breakout level weakens the bullish idea. Judge the full sequence.
Let’s work through it
- Locate the strength event
- Evaluate the reaction
- Calculate risk before entry
Let’s use numbers · hypothetical example
Range 100–110 breaks 114, returns 109.5, then recovers 112. Hypothetical entry 111, stop 109, target 115 gives 2 points risk and 4 points gross reward:2R before costs.
Easy mistakes to watch for
- Every dip is LPS
- Chasing a missed retest
- Ignoring costs
Keep in mind
An LPS can fail. Size from stop distance and risk budget, not confidence in a label.
Your turn
Compare buying 114 with waiting 111. Write both plans' trade-offs and failure conditions.
A quick check before we move on
Entry 111, stop 109, target 115 gives which gross reward-to-risk?
- 2R
- 4R
- 1R
Check answer
2R Risk 2, planned reward 4:4÷2=2R. Execution costs reduce the actual result.
Sources and further reading
Content reviewed: 29 October 2026
Educational material with hypothetical examples. Trading can cause substantial losses. A course, pattern, stop order or past result cannot guarantee a profit or limit every loss. Practise in simulation and check current rules and product terms in your jurisdiction.
