Characteristics of False Breakout

In the world of trading, of course, you are no stranger to the term trend that can happen anytime, anywhere and happen to anyone without taking into account the existing situation and conditions. Usually trends are unpredictable and come suddenly with fast movements. Traders must understand the strategy in reaching the trend without rushing, but still getting big profits. In the trend is also known as a breakout that occurs in a trend movement. There are two kinds of breakouts, namely real breakouts and false breakouts. On this occasion, we will discuss more deeply about false breakouts and how to overcome them so that you do not experience large losses.

For traders, they must be careful in identifying false breakouts if under certain conditions the price shows the same characteristics. Most traders try to force entries when there is a trend, even though the market is not in good shape and it is quite risky to continue. Not infrequently many people are traumatized when dealing with an uncertain market, especially those who often follow trends. The trauma arises because they feel pressured to face many things when prices move unstable or do not follow price volatility. Thus, the ability to analyze market price movements is important here.

In fact, most people think that following the market movements is a trap that sometimes they will deceive themselves. When a trader has been deceived and entered into a trap, it is most likely to experience a loss or floating condition. This kind of situation is not what every trader expects when entering the market. Therefore, it's time to learn about how to tell if a breakout really happened or just a market bluff so that prices go against the trend at that time. Traders must be responsive to the existing conditions and prepare everything to avoid false breakouts.

Therefore, it's time to learn about how to tell if a breakout really happened or just a market bluff so that prices go against the trend at that time. Traders must be responsive to the existing conditions and prepare everything to avoid false breakouts. Here are the steps that you must prepare to overcome the False break:

1. The first thing you need to prepare in dealing with a false breakout is the ATR (Average True Range) indicator with a period of 14. This indicator will help and notify you if a signal error occurs.

2. Traders must prepare Candlestick Charts, where this chart will help traders analyze trades with breakout techniques, which will inform you about current trend conditions.

3. Support and Resistance, in setting support and resistance a horizontal line is needed, which is then used to determine the area of ​​price saturation and trend reversal.

By knowing the condition of the trend in advance, traders certainly have time to find a way in case of a breakout. Those are some important things or tools that traders can use to find out whether there is a false breakout or not.

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