Using fake breakouts to trade
In order to profit from conducting trades during the occurrence of false breakouts, you must be sure to follow the following rules:
Typically, after the breakdown, the false price level moves in the opposite direction no later than after the formation of three candles.
During the formation of a normal failure, there was usually a wave of instability.
To trade during the occurrence of false breakouts using a fairly simple strategy that consists of a series of sequential steps:
At the beginning, it is necessary to wait until the price level affects the support and resistance line. Do not open any wait orders during the time that touches will occur.
If you are sure that the pattern is wrong, as soon as the price breaks the level of the channel border, you should open an order in the opposite direction.
It should be noted that at the time of the breakdown, there may be an immediate reversal in the price or the price level will develop after the formation of two or three candles.