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How to Trade False Breakouts
Among the different types of technical traders, we can find two large groups: range traders and those stalking the breakouts. There is also a mix of both approaches. In some cases, a breakout can prove to be a “fakeout” that provides a significant trading opportunity in the opposite direction. Here’s how it works, with a recent example on EUR/USD. Range vs. Breakout After a pair is capped or supported by a certain technical level and gets close to this level, range traders will try going for the opposite direction: buying the pair when it gets close to support or selling it when it gets close to resistance. A ... (full story)
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