How to spot and avoid Fake Breakouts.
The deciding factors of Fake breakout are:-
1. Major and Minor trend
2. Key levels.
Fake breakouts often happen in a ranging market ie when the minor trend is opposite to the major trend.
Example:- when u see a minor downtrend in a major uptrend, we can expect a fake breakout from a key level.
Key Levels can be previous support and resistance, fibonacci lines, Round numbers, Bollinger bands or EMA's.
If we have a weak minor trend and a strong key level, price can give a fakebreakout from this level.
To Know more about this topic like and comment below.
1. Major and Minor trend
2. Key levels.
Fake breakouts often happen in a ranging market ie when the minor trend is opposite to the major trend.
Example:- when u see a minor downtrend in a major uptrend, we can expect a fake breakout from a key level.
Key Levels can be previous support and resistance, fibonacci lines, Round numbers, Bollinger bands or EMA's.
If we have a weak minor trend and a strong key level, price can give a fakebreakout from this level.
To Know more about this topic like and comment below.