Simple Way to Avoid False Breakouts | Forex Factory

  • Simple Way to Avoid False Breakouts

    From dailyfx.com

    Breakout trading can be a rewarding strategy in volatile markets, but is often plagued with fake signals and false breakouts that can discourage even the best traders. Today, we will cover what a fake breakout is and how to avoid them in our trading. What is a False Breakout? A false breakout is when price temporarily moves above or below a key support or resistance level, but then later retreats back to the same side as it started. This is the worst case scenario for a breakout trader that enters in a trade as soon as price breaks. We are immediately faced with a red arrow on our chart and the breakout we traded is ... (full story)

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GDR3k
May 22, 2014 10:55am
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Such rubbish. The currency chart which is in that article is USDCHF, more specifically showing the 1 hour candles on the 18th May, 21st May and 22nd May. If you had entered long at that 1 hour candle which closes higher than the resistance (like the article suggests) and decided to hold that position, you would most likely have been stopped out on the 23rd May or a few days after that.

A simple way to avoid false breakouts? Don't listen to a website which is owned by a market marking broker. Simples.

Same goes for that eFx_news crock of steaming excrement, every analysis they post turns out to be incorrect.
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Mike Haran
May 22, 2014 11:59am
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Yes a cherry picked example to make it all seem so simple, any break out trader is inclinded to get shafted in these markets
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