Breakout vs Fakeout — How to Tell the Real Move from the Trap

If you've traded for a while, you already know the pain: the chart finally breaks a level, you jump in… and a few minutes later the price snaps right back. SL gone. Mood gone.

That’s the classic fakeout.

Here are a few simple ways to avoid that trap and spot the real breakout:

✅ 1. Watch the Volume

Real breakouts usually come with strong volume.

If the price breaks a level but the volume barely moves, be careful — it’s often just noise.

✅ 2. Candle Body Matters

A wick pushing above a level means nothing.

You want a solid candle closing above or below the level. That’s where momentum shows up.

✅ 3. Don’t Skip the Retest

The healthiest breakouts often pull back to retest the broken level before the real move begins.

No retest? Higher chance it was just a quick liquidity grab.

✅ 4. Match It with Market Structure

Breakouts work best when they follow the trend:

• Uptrend → resistance break is more reliable

• Downtrend → support break has more strength

Sideways/ranging markets create fakeouts all day.

✅ 5. Be Aware of Liquidity Hunts

Price often spikes above a level just to clear the stop losses sitting there — then reverses immediately.

Fast spike + instant drop = fakeout almost every time.

⚠️ Bonus Tip:

During major news events, breakout trading is basically gambling. The price jumps everywhere, and fakeouts are super common.

🎯 Quick Reality Checklist:

• Strong volume

• Body candle closing beyond the level

• Clean retest

• Aligned with the trend

If these line up → worth taking the trade

If not → staying out is a trading decision too.

💬 Ever been trapped in a fakeout? How often does it catch you off guard? Share your story below!

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