FALSE BREAKOUT

S T R A T E G Y G U I D E

• Can be used in any market condition where traders are looking to trade the breakout.

• Can be used in ascending, descending, and ranging markets.

• Can be used with various key levels of support and resistance.

• It is determined by three candlesticks

FALSE BREAKOUT PATTERNS

BEARISH FAKEOUT
• The bullish engulfing pattern could indicate a
good opportunity to get into a trend.

• When the bullish engulfing pattern is followed

by a bearish pin bar at resistance, it could
indicate a fakeout.

• The sellers have taken back control.

• The signal is strongest when the bearish pin bar

closes back inside the first candle’s body.

BULLISH FAKEOUT
• The bearish engulfing pattern could indicate a
good opportunity to get into a trend.

• When the bullish engulfing pattern is followed

by a bearish pin bar at resistance, it could
indicate a fakeout.

• The buyers have taken back control.

• The signal is strongest when the bullish pin bar

closes back inside the first candle’s body.

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 BEARISH FAKEOUT STRATEGY

• In this example, we’re using the daily pivot point indicator to give us resistance levels,
and enter trades on the 1 hour chart.

• The market is in an uptrend up to R1.

• A bullish engulfing pattern appears, a good opportunity to go long if the trend

continues.

• However, a bearish pin bar closes below R1, which could indicate that the breakout
signal was false.

• The optimal trade in this example is a short entry at the bottom of the bearish pin.

• In this example, the stop loss is placed at 50% of the bearish pin bar to limit risk bar.

• A good time to take-profit is the next level of support (the pivot line in this example).

• Don’t risk more than you are willing to take as profit.

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The information provided within this PDF is for educational purposes only.
 BULLISH FAKEOUT STRATEGY

• In this example, we’re using the daily pivot point indicator to give us support levels,
and enter trades on the 1 hour chart.

• The market is in a downtrend down to S1.

• A bearish engulfing pattern appears, a good opportunity to go short if the trend

continues.

• However, a bullish pin bar closes above S1, which could indicate that the breakout
signal was false.

• The optimal trade in this example is a long entry at the top of the bullish pin bar.

• In this example, the stop loss is placed at 50% of the bullish pin bar to limit risk.

• A good time to take-profit is the next level of resistance (the pivot line in this
example).

• Don’t risk more than you are willing to take as profit.

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The information provided within this PDF is for educational purposes only.