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Rectangle

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
EurUsd -> There Is Your Bullish Plan!Hello Traders and Investors , my name is Philip and today I will provide a free and educational multi-timeframe technical analysis of EurUsd 💪 EurUsd just perfectly retested and already rejected the 0.618 fibonacci level in confluence with a retest of previous support which was after the break turned strong resistance. EurUsd is also now approaching weekly support and also the bottom of the solid rising channel so after some bullish rejection it will be quite likely that EurUsd provides more short term bullish upside. With the moving averages shifting bearish on EurUsd just a couple of days ago, there is no need to look for a long setup now - Instead I am waiting for the inverted head and shoulders to play out and then I am looking for longs on a retest of the neckline. Keep in mind: Don't get caught up in short term moves and always look at the long term picture; building wealth is a marathon and not a quick sprint📈 Thank you for watching and I will see you tomorrow! My previous analysis of this asset:
Long
by basictradingtv
41
Gujarat GasGujarat gas is in the range of 430-530 from very long. while analyzing weekly chart we see 403 as a strong support and the downward sloping trading line is also about to break. One can make a small entry now and aggressive entry above the trendline breakout. Recently on result day it made a low of 440 which looks out to be a bottom for the year, from there it made a good green doji candle and then 2 good green follow-up candles. It is looking to fill the gap which it created and can give a good rapid move above 494 closing which is acting as a small resistance as of now.
NSE:GUJGASLTD
by manideepcs024
🔴 #BTC short setupThe BTC chart looks bearish. We've formed a pattern of a small base under a larger one, with a small base also located under the BoS short level at 29400. I'm considering a scenario where price returns to the high-volume level of the larger base at 30262, and tests the imbalance range (30530-30900) from above before moving downward. At the high-volume level, I'll be searching for an entry into a short position with the following targets: TP1 - 29285 - high-volume level of the small base TP2 - 27660 - 0.5 imbalance of the 4-hour and daily candle TP3 - 26050 - 0.5 imbalance of the daily candle and high-volume level at 25790 I will place the stop loss beyond the imbalance boundary at 31030.
Short
by flamefh
A Trade Example in The Nasdaq Futures Using a Simple TA ConceptThis was a really clean example of a really basic price action based set-up. On the short-lived Holy Grail trade(See my most recent live stream for a walkthrough of the holy grail trade set-up) that resulted in a false breakout, price begins to reverse and want to cross back through the established range on the 5 minute chart, as we begin tending back towards the middle of the range, we want to enter a trade, playing short term, attempting to take out the range high. I am currently working on getting my profits off the table much earlier and not being a "dick for a tick" so any time I get a trade between 2-4 R in my favor, I am taking my profits and running. I narrate all of this in this video CME_MINI:MNQ1!
CME_MINI:MNQ1!
by outlier1500
💡Signs of the end of the Bitcoin Range Market💡Hi everyone👋 (Reading time less than 5 minutes⏰) . Bitcoin has been moving in a Rectangle Pattern for over 25 days ⏰. 📚 Rectangular Pattern : The rectangle is a classical technical analysis pattern described by horizontal lines showing significant support and resistance. It can be successfully traded by buying at support and selling at resistance or by waiting for a breakout from the formation and using the measuring principle. 🌊According to the theory of Elliott waves , the structure of the main wave 5 was Expanding Ending Diagonal , and it is expected that the beginning of corrective waves will be confirmed after the break of the lower line of the rectangle pattern . 💡Bitcoin's entry into the lower area of ​​the rectangle pattern is different this time than before, as it is the first time in the past two or three days that Bitcoin has significantly broken below the 100-SMA and 100-EMA . 💡Also, a SELL signal can confirm the end of the five impulse waves of Bitcoin. 🔔I tried to chart the possible movements of Bitcoin over the next 2-3 days . 🔔I expect Bitcoin to FALL to at least the 🟢 support zone($28,450-$28,080) 🟢 after breaking the lower line of the rectangle pattern. --------------------------------------------------------------------------------------------------------- 🌐➕ Positive News ➕🌐: Rich Dad Poor Dad Author Says He’s Sticking With Bitcoin (BTC) Amid ‘Sad’ State of America. A recent Glassnode report shows that the number of addresses with at least one Bitcoin(BTC) has reached an all-time high SEC accepts BlackRock’s Bitcoin ETF application for review 🌐➖ Negative News ➖🌐: Major Australian Bank Bans Payments to Binance Amid Regulatory Crackdown. Financial Stability Board Calls for Tougher Global Crypto Rules After Year of Turmoil US Government Moves $305,000,000 Worth of Bitcoin (BTC) Seized From Silk Road --------------------------------------------------------------------------------------------------------- Bitcoin Analyze ( BTCUSDT), 4-hour time frame⏰. Do not forget to put Stop loss for your positions (For every position you want to open). Please follow your strategy, this is just my Idea, and I will be glad to see your ideas in this post. Please do not forget the ✅' like '✅ button 🙏😊 & Share it with your friends; thanks, and Trade safe.
Short
by pejman_zwin
39
ATUL LTD BULLISH BREAKOUTPrice was in downtrend from September 2022, and started ranging since April 2023. This range could be an accumulation phase, and today we got the breakout with a strong body candle and good volume. Also, check the Bullish RSI divergence which gives more strength to the breakout. My only concern is the 200 Daily Moving Average sitting just above the price. I expect a small rejection from there. Once price closes above 200DMA, then we can expect beginning of a new uptrend. This could be a midterm investment . Keep a close eye on this stock.
NSE:ATULLong
by rohitkukreja
Bitcoin - Bart pattern + Comment your altcoin!Make a comment with your altcoin below this idea, and I will give you my opinion/analysis of it in reply! Make sure you hit the boost button as well to participate. I will answer your comment with an analysis for you on the weekly/daily chart (long term). I start my analysis with Bitcoin: The bart pattern is a new type of chart pattern that occurs specifically on Bitcoin but sometimes also on other coins. It's something like pump and dump, but at the top of the pattern we have a sideways price action that looks like a Bart's head. Usually August and September are the most bearish months on Bitcoin, so I would not be surprised! Set up notifications for my ideas so you will be alerted in your email when I publish new analyses immediately! When we look at the daily chart, we can see an ascending parallel channel with 3 touches at the bottom. This indicates to me that the bulls are losing steam because they are unable to make a parabolic uptrend! There is still a possibility of going up to 32k - 33K in the short term, but this is something I don't want to speculate on. And even if Bitcoin could pump to these higher levels, the crash would follow either way. My Elliott Wave count suggests that a deep retracement is on the way up back to 20k or 21k, which is definitely a good price to buy as much Bitcoin as possible and prepare for the new bull market in 2024 and 2025. Also, you can open a long-term leveraged position on futures in this zone. We still need to wait around 8 months for the halving event, and that's plenty of time for a crash. We have a lot of unfilled FVGAPs and a CME GAP below the current price. They are going to be filled sooner or later. If we take a LOG fibonacci retracement from 16.3k to 31.5k, we can see that the 0.618 golden ratio is at 20303. The whales really like to buy BTC at this specific Fibonacci level, as it has the highest successful rate of all Fibonacci levels. This bart pattern looks pretty funny, but if you are on the wrong side of the market, it's definitely not funny. The price moves extremely fast, and you can wake up into a massive red dildo. This analysis is not a trade setup; there is no stop-loss, entry point, profit target, expected duration of the trade, risk-to-reward ratio, or timing. I share my trades transparently and post trade setups privately. Thank you, and for more ideas, hit "Like" and "Follow"!
Short
by UnknownUnicorn2537518
356
Bitcoin - Falling wedge will send BTC to 32k! (act quickly) The price of Bitcoin is currently forming a bullish falling wedge pattern, and we are very close to a breakout! Trade it properly. We can see that the price broke out of the strong horizontal line (at 29500), but the bears are weak and they are not able to continue in the downtrend. What is now likely is that the bulls are going to push the price back above the line and pump bitcoin to 32K! 32k is a strong resistance because of the ascending trendline, so make sure you take profit or open a short when the time comes! On the way up to 32k, we have some minor resistances, such as the previous unfilled FVGAP and 0.618 FIB retracement. Good for intraday pullbacks, but nothing huge. This analysis is not a trade setup; there is no stop-loss, entry point, profit target, expected duration of the trade, risk-to-reward ratio, or timing. I share my trades transparently and post trade setups privately. From the Elliott Wave perspective, we clearly see an overlapping structure in the downtrend. I marked it as WXY (double three pattern). Also, the X wave looks like a triangle, which suggests that the downtrend is almost over. This is my update on BTC. I expect higher prices for the crypto market in the next few weeks! Alt season is ready, so make sure you buy some altcoins if you haven't already, as per my previous analysis. Set up notifications for my ideas so you will be alerted in your email when I publish new analyses immediately! What do you think about Bitcoin? Let me know in the comment section; I look forward to your opinions! Thank you, and for more ideas, hit "Like" and "Follow"!
Long
by UnknownUnicorn2537518
115