Trading The Fakeout by Fawad Razaqzada
Can you profit from fakeouts? Here’s one trader’s take on how to identify these patterns and trade them profitably.
A false breakout—or fakeout—is by far one of my favorite technical patterns. It is when price momentarily moves above a previous high or below a previous low, but then goes back within the existing range. This happens when there isn’t enough demand above the old high, or enough supply beneath the prior low, to help push price significantly in the direction of the break ...