How Do We Know Support or Resistance is truly Break-Out?

There is no absolute answer to that question. There are some arguments that say that the level of support or resistance break-out when the closing price has passed that level. But in reality not always so. Let's look at an example below and see what happens when the price closed through the resistance level 2500. 

In this case, the price had closed twice above resistance level 2500 but they always end with prices that falling back below the resistance level. If you really believe in what you see and say that this is an actual breakout, and then take action to buy, then you will feel very sad. Let's look at the chart now, you can see and make a conclusion that the actual resistance level has not really break-out, and the level is now even stronger than before.

To help you filter out what is called false breakout, you should think that support and resistance as "zones" rather than exact number. One way to help you find these zones is to plot support and resistance on the line chart not in the candlestick chart. The reason is that the line chart only gives you the closing price, while candlestick adding high and low in the chart. High and low can be a misleading because it is often just a temporary reaction from the market.

When you create a boundary support and resistance, of course you do not want a reflex movement of the market. You just want to restrict the intentional movement.

See line chart below, you will limit the support and resistance line around the area where you can see the price forming several peaks and valleys.

If support break means that the seller more dominant, or many people take sell position on the support price. Most market players believe that the proper price is below the level of support.

If the price touches the support and then bounce up and up, it meaning the majority of market players do not want the price dropped below support level. Since the number of buyers who have the purchase price in the support price.

If resistance is break it means that the buyer is more dominant, or many people take buy position on the resistance price. Most market players agree and dare to buy at higher price.

If the price touches the resistance and then bounced down and down, it means that the majority of market players don't want price to rise further. Since the number of buyers who take profit on this resistance price.