How to Find Fakeouts?

Breakouts are popular among forex traders.

It makes sense right?

When price finally “breaks” out of that support or resistance level, one would expect price to keep moving in the same direction of the break.

Support and Resistance Levels Are Very Tricky

Support levels

Support levels are areas where buying pressure is just enough to overcome selling pressure and halt or reverse a downtrend.

A strong support level is more likely to hold up even if price breaks the support level and it provides traders a good buying opportunity.

Resistance Levels

Resistance levels are just like support levels but work in the opposite way. They tend to halt or even reverse uptrends.

Resistance levels are areas in which selling pressure is just enough to overcome buying pressure and force price back down.

Strong resistance levels are more likely to hold up even if price temporarily breaks the resistance level and it provides traders a good selling opportunity.

In the next section, we will dive deeper into fakeouts and discuss why we should trade them and how to profit off them.

It’s not enough learning about breakout strategies because there will be times that breakouts FAIL. We have to know what to do in case of fakeouts.

This is part of your  forex training. 

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