Trading Traps
Fakeout
A false move beyond a key level that quickly reverses
A fakeout is a deceptive price move that briefly breaks through a significant level (support, resistance, or trendline) before reversing. It triggers stop losses and traps traders on the wrong side.
✓How to Recognize
- •Brief penetration of key level
- •Low volume on the breakout
- •Long wicks showing rejection
- •Quick reversal back inside the range
⚡How to Avoid
- →Wait for candle close beyond the level
- →Require volume confirmation
- →Use wider stop losses around key levels
- →Watch for multiple timeframe confirmation