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Fakebreakout

The Art of False Breakouts + RSI: COMPOUND! 📉🚀Trading is an intricate game of psychology, and understanding false breakouts can be the key to success. Let's delve into COMP, where false breakouts played a pivotal role in recent price action. 📉🚀 Closer look to Fakeout : Deconstructing False Breakouts False breakouts are like crafty illusions, luring traders into making premature decisions. COMP, a cryptocurrency known for its volatility, recently demonstrated how these maneuvers can shake the market. From False Bottom to False Top COMP first tricked traders with a false breakdown from the lower range, inducing panic. But as if by sleight of hand, it quickly shifted gears, delivering a false breakout from the upper range, catching many off guard. Trading Wisdom: The Lesson Here The case of COMP underscores the need for cautious trading, especially in volatile markets. Recognizing false breakouts can help you avoid unnecessary losses. Strategies involving stop-loss orders and thorough research can be your shield against these tricky moves. Conclusion: Mind the Illusions COMP's recent shenanigans emphasize the significance of identifying false breakouts. This knowledge can give traders a substantial advantage and help them navigate the turbulent waters of crypto trading. 📊 Trading Strategies | 🧠 Psychology | 📈 Price Action | 💡 Insights | 🌐 Cryptocurrency ❗See related ideas below❗ Share your thoughts in the comments! 💚📉💚
Education
by Yaroslav_Krasko
How to trade Fake Breakouts in the range Range trading, characterized by price oscillations within defined support and resistance levels, offers traders a structured approach in sideways markets. However, even within these stable waves, deceptive price movements known as fake breakouts can occur. These false signals can lead traders astray if not properly recognized and managed. In this article, we'll delve into the world of fake breakouts within range trading, equipping you with strategies to identify and navigate these misleading market dynamics. Understanding Fake Breakouts: A fake breakout occurs when price seemingly breaches a support or resistance level but quickly reverses back into the established range. These deceptive moves often trigger stop-loss orders and entice traders into taking positions in the direction of the apparent breakout, only to experience a sudden reversal against their trades. Fake breakouts are fueled by market manipulation, emotional trading, or sudden news events. Here are few examples of fake breakouts in big Time-frames : Often, this is not enough for entering a position. Combine this with divergences on RSI or other factors for entry. Key Characteristics of Fake Breakouts: Swift Reversal: A true breakout sustains its direction, while a fake breakout swiftly reverses back into the range. High Volatility: Fake breakouts often coincide with spikes in volatility due to market confusion and emotional reactions. Trapped Traders: Traders who entered positions based on the fake breakout are "trapped" when the market reverses, leading to potential losses. Navigating Fake Breakouts: Confirmation Through Candlesticks: Wait for candlestick confirmation beyond the breakout level. A close above resistance or below support lends greater credibility to the breakout. Increased Volume: Look for a surge in trading volume accompanying the breakout, indicating genuine market participation. Use of Indicators: Rely on technical indicators like the Relative Strength Index (RSI) or Moving Average Convergence Divergence (MACD) to validate breakout momentum. Strategies for Trading Fake Breakouts: False Breakout Reversal: Enter positions in the opposite direction of the fake breakout when price returns to the range, targeting a retracement towards the opposite boundary. Wait-and-Watch Approach: Allow the breakout to develop and wait for confirmation before entering a trade, avoiding pre-mature positions. Risk Management When Dealing with Fake Breakouts: Tight Stop-Loss: Set a tight stop-loss order beyond the breakout point to limit potential losses if the breakout reverses. Position Sizing: Allocate a smaller portion of your capital to trades involving potential fake breakouts due to the increased risk. Pros and Cons of Trading Fake Breakouts: 👍 Pros: Opportunities in Deception: Skilled traders can capitalize on market deception by trading against fake breakouts. Enhanced Risk Management: Proper identification of fake breakouts allows traders to minimize losses through tight stop-loss orders. 👎 Cons: Increased Complexity: Identifying fake breakouts requires additional analysis and indicators. Risk of Mistakes: Mistaking a genuine breakout for a fake one or vice versa can lead to missed opportunities or losses.
Education
by Yaroslav_Krasko
Fake-Breakout coming out of last week ↗️ 🌞PCE news last Friday took price back inside the range between 1.08919 Weekly Support level and 1.09859 Daily Resistance Level. The Friday daily candle retraced nearly the whole Thursday candle that contained GDP and unemployment claims data. I'm looking for this price behavior to continue into the early trading of this new week. The Idea is that we should have continued down last friday towards 1.07821 Daily S/R Zone. We didn't and instead we Eurusd has spring itself back in the range. A Fake breakout or Fakeout. I can see us returning to the top of the range basically. The Monthly candle closed Bullish for June. Looking for the same during July with the first target for July being 1.11. The second target being 1.11853. Price has been consolidating so far this year on eurusd. However, the market structure is consolidating upwards. The 3 month candle jsut closed a 3rd consecutive bullish candle. Why not more bullish?
Long
by ShrewdCatfx
TSLA Break-Out & Fake-Out?Tsla has been consolidating and broke-out of a bullish bullish flag today with weak conviction ... Bulls need to see a big volume break-out tomorrow and regain $200 as support. *Call Wall Options may have prevented Tsla from advancing with a strong break-out $197 is strong resistance + weekly resistance line just above @ $198 $198.84 If Tsla does not open above $198 we may see a drop to test bull flag break-out & gap-fill. Close below $195 Tsla will consolidate until re-testing highs. *Bulls: Tsla is above 8 ema, 20 ma & 50 ma -Cup & Handle on Daily w/ Bullish Flag Break-Out.... Dips are being bought up *APRIL is STRONG Month for Growth & Tech Bears- Weakness compared to overall Bull Run in Tech & Markets - Selling volume has been larger on 1 hr, 4hr, daily. Markets are feeling pretty Frothy Possible Bearish Wedge Pattern...this could be wave a of c in Correction Pattern - lack of testing or either Strong Rejection at $200 could begin wave b. Bearish Divergence on MACD & RSI 1hr & likely forming on Daily if we see the move past $200.66 This could go Bullish or Bearish *Key Points of interest: Key Close above $198.84 / Ability to Test $200.66 & Rection off of that will give us a better Idea of where TSLA Plans to go for the next 3 weeks until next Earnings Current Bias: Neutral to Slightly Bearish
NASDAQ:TSLA
by Black_Sheep1
1
BTCUSD: Death to the B*TC*After 7 years of studying charts, you start to see obvious patterns that beginners miss. I know that the majority of the market is buying BTC now after the trend line breakout. The charts suggest it and so does the sentiment. So what will I be doing if the majority are buying, SELLING. I don't want to be greedy, I simply want to find an area to sell from in this region to clear some of the buyer liquidity from the market. Anyway, it's been a while! I have committed to start posting here again. I have nothing to sell you, I trade for fun and don't need your money - I hope you enjoy my content.
Short
by AlkalineFX
8
BTC Wyckoff accumulation phase before new Rally ! BTCUSD BTCUSDTHi dear community and the best followers. I hope you are fine. I appreciate your support, likes and comments. Today I'm looking at 3d chart of BTCUSD. As you know since 18 June 2022, I have been posting BTC bottomed and it is preparing for new Rally /new ATH/ before new recession and Fed Pivot starts. I expect new ATH by Q2-Q3 in 2023. If you check my other analyses bellow related ideas, you will understand why I think so. So as you see, I have drown BTC Wyckoff accumulation phase and think when BTC broke 28-30K one of the major support zone/Preliminary support/and dumped to 17.5K in June 2022, that was selling climax with huge increasing volume + smart money huge buy, that point I called the real bottom of BTC bear market based on my analyses and history data/you can check them bellow/. Then BTC did automatic rally, and dropped again to the same support zone making secondary test. The recent dump which I called fake breakdown/bear trap/ with double bottom+ RSI bullish divergence is a spring of Wyckoff phase like 2021 November top, which was a fake breakout/ bull trap/ with double top+ RSI bear divergence. At the moment I expect test of 16-16.5K then pump to 18.5-19K then 21-22K > 24-26K > 28-30K but of course with pullbacks making HH and HL. Please don't forget to follow me. I will appreciate any single follow, like and comment. Thanks in advance.
BITSTAMP:BTCUSDLong
by ergal91
7