False breakout – how to identify? + my favourite price action setup
False breakouts are exactly what they sound like: a breakout that failed to continue beyond the level, resulting in a ‘false’ breakout of that level. False-break is often very strong clue that price might be changing direction or that trend might be resuming soon.
I like this pattern most fall, It has made a lot of money. All because of great ratio of risk to profit. SL has to be above breakout pattern and take profit few times exceeds SL.
In my video I shared my favourite setup – false breakout is identified by two candlesticks – one breaks above resistance level and other returnes below it. This pattern can be used on diferent markets, but best of all it works on indexes.
Wish you all good trades and profitable week!