How Do You Identify A Fake Breakout? | Page 2 | Forex Factory

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How Do You Identify A Fake Breakout?

  • #21
  • Feb 5, 2013 2:00pm Feb 5, 2013 2:00pm
Using your smaller pic as an example, it actually works from both our points of view. If i traded that short breakout - the fake one. I would have been vary wary when price entered the zone i've amended on your chart. Which you could argue is S/R or supply/demand. Either way, it's an area of interest and somewhere that could ( and did ) be likely to reverse price

that info about Sam's course is an eye opener, and I have to say, i tried to 'touch trade' the levels like he does and fared very very poorly. Once i combined PA + orderflow at those levels things picked up very quickly. I no longer touch trade levels.

As for indicators - yes they did teach me a lot - I personally think their most useful purpose is to show divergences.

They all work great when price is at an important level anyway

Apologies for missing your other posts. Either way, the original poster now has a few more nuggets to chew over and make his own mind up.
Attached Image
- Look to the left, Trade to the right - I am the system
  • #22
  • Edited 5:53am Feb 6, 2013 2:30am | Edited 5:53am
thanks for all your input fellas.

however, i havent read anything that can give an edge in identifying fakeys. most of the stuff discussed is common knowledge really.


  • #23
  • Feb 6, 2013 3:11am Feb 6, 2013 3:11am
Quoting whatfx
thanks for all your input fellas.

however, i dont see anything that can give an edge on identfying fakeys. a lot of what has been discussed is common knowledge really.


Be sure to let us know if you find out a good method. We did our best.
Gone to a better place
  • #24
  • Feb 6, 2013 4:40am Feb 6, 2013 4:40am
Quoting smikester
Be sure to let us know if you find out a good method. We did our best.

As it is difficult to "predict" whether it is a Fake Breakout or a Real Breakout, perhaps we should change the question to:
How do we know it is a Fake Breakout as soon as it happened (eg. 1-bar after) ?
What to do about it once we know it is a Fakey?
  • #25
  • Feb 6, 2013 5:51am Feb 6, 2013 5:51am
Quoting foxybunny
As it is difficult to "predict" whether it is a Fake Breakout or a Real Breakout, perhaps we should change the question to:
How do we know it is a Fake Breakout as soon as it happened (eg. 1-bar after) ?
What to do about it once we know it is a Fakey?
i guess that is correct also.
  • #26
  • Feb 6, 2013 7:37am Feb 6, 2013 7:37am
Indicators due to the fact there mostly used wrongly they get a bad rep, but in this case, use a trendline if/when prc brks/closes above/below trendline and macd confirms this by closing below/above the water-line, it's not 100% but nothing is, add the higher time frame analysis and it's as good as your gonna get...
  • #27
  • Feb 6, 2013 7:50am Feb 6, 2013 7:50am
Quoting whatfx
thanks for all your input fellas.

however, i havent read anything that can give an edge in identifying fakeys. most of the stuff discussed is common knowledge really.


The only trader I have seen with a system that can distinguish between a fakeout and a breakout is Crucialpoint. He has a proprietary method of measuring momentum that can identify if an initial impulse has enough behind it to push through any S/R levels.

http://www.forexfactory.com/showthre...=361635&page=3

http://www.forexfactory.com/attachme...1&d=1337073791
Audentes Fortuna Juvat
  • #28
  • Feb 6, 2013 12:05pm Feb 6, 2013 12:05pm
the question can be rephrased as how do I avoid losses?

its impossible to avoid false breakouts in trading as there is a lot of randomness in price movement,unexpected news or a big order may hit the market anytime changing the dynamics instantaneously.
wo-yoy! wo-yoy! wo-yoy! wo-yoi! wo-yoy-yoy-yoy!
  • #29
  • Feb 7, 2013 4:32am Feb 7, 2013 4:32am
Quoting Nijee
The only trader I have seen with a system that can distinguish between a fakeout and a breakout is Crucialpoint. He has a proprietary method of measuring momentum that can identify if an initial impulse has enough behind it to push through any S/R levels.

http://www.forexfactory.com/showthre...=361635&page=3

http://www.forexfactory.com/attachme...1&d=1337073791


can you explain a bit more ? why is the first circle a fakey and the 2nd one not ?
  • #30
  • Feb 7, 2013 6:25am Feb 7, 2013 6:25am
however, i havent read anything that can give an edge in identifying fakeys. most of the stuff discussed is common knowledge really.

Got it in one,,,,,,,,,
Best course of action is study false breaks out in the past history, just scroll back and watch.
Trend, Momentum, higher time frame , there only hints,

(tip) allow prc to tell you whats happening, and admire the brave who get in early,
  • #31
  • Feb 7, 2013 6:52am Feb 7, 2013 6:52am
"How Do You Identify A Fake Breakout?"


When price hit my stop loss
Never laugh at anyone's dreams. "Dalai Lama"
  • #32
  • Feb 7, 2013 6:59am Feb 7, 2013 6:59am
Quoting dalaipip
"How Do You Identify A Fake Breakout?"


When price hit my stop loss

Out standing LOL
  • #33
  • Feb 7, 2013 7:00am Feb 7, 2013 7:00am
I am a bit boring and would not trade on the day of the perceived breakout, but would wait for confirmation in the following day (i.e. prices hitting a new high).
  • #34
  • Feb 7, 2013 11:05am Feb 7, 2013 11:05am
Quoting Sebastiaan76
Further to above - this is what happened the other day. I shorted this.

also google 'Frankie Fakeout' and probably wouldn't hurt to check out some of the stuff on this forum to do with Orderflow and why false breakouts happen + why they cause such big moves in the opposite direction.

see attached.

hey where can i download stuffs bout frankie fake out
emotions when not properly managed acts as bariers
  • #35
  • Feb 7, 2013 1:21pm Feb 7, 2013 1:21pm
Quoting primefx
hey where can i download stuffs bout frankie fake out


See pic for detailed instructions
Attached Image (click to enlarge)
Click to Enlarge Name: how to search.jpg Size: 27 KB
- Look to the left, Trade to the right - I am the system
  • #36
  • Feb 7, 2013 2:15pm Feb 7, 2013 2:15pm
The breakouts that are NOT fake are the ones that you did not take.
  • #37
  • Feb 7, 2013 4:55pm Feb 7, 2013 4:55pm
LOL

Quoting Sebastiaan76
See pic for detailed instructions
Never laugh at anyone's dreams. "Dalai Lama"
  • #38
  • Feb 7, 2013 4:59pm Feb 7, 2013 4:59pm
There is no magic answer.

IMO best what you could do is gain experience:

1) Define what is a fake breakout for you.

2) Monitor those cases you would have liked to enter.

3) Try to look for nuances/repeating traits that might contribute to fake break out.

Taking screenshots of tick charts around BO or even video capturing might help to analyse data more precisely some time later.
  • #39
  • Feb 7, 2013 5:00pm Feb 7, 2013 5:00pm
Quoting 4exNinja
On the lower timeframes (H1 and below)...well...flip a coin in my opinion. Your data's delayed by 15min, so you never see the current picture until it's too late.

On the higher time frames, always wait for CONFIRMATION before entering a trade...don't try to pick tops and bottoms

The THV system is great at catching false breakouts.
Biggest load of paranoid ignorance I've seen today. Everybody thinks Wall Street and their broker are out to get them so they can excuse themselves of their poor trading performance. If you have a reputable broker your data feed is as live as you can get it.

Also, it's not possible to tell in real time if a breakout is going to get knocked down right after launch or not. A reputable member here once said (and I paraphrase) that "playing breakouts are like pissing away your money". Play the re-test instead.
  • #40
  • Feb 7, 2013 5:54pm Feb 7, 2013 5:54pm
Answer: after it happens.
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