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Nice to explain .
Absolutely! It's crucial to be wary of fake breakouts in the market designed to trap users. 🚨 Pay close attention to the 4-hour timeframe for candle closings – it provides more reliable signals. 🕰️ Remember, the market tends to work better on larger timeframes like 4-hour, daily, and weekly, rather than smaller ones like 5-minute or 15-minute charts. 📈 Keep your focus on the bigger picture for more accurate insights and better decision-making! 👀
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Someone asked me a really good question so i decided to answer it with a post so more people can know.
you can't exclude that fakeout/trap thing from the market it can always happen but to avoid that you simply use that breakout area as your invalidation and once you see the price is going down under that breakout area again you simply manage your risk and exit your trade. Much better if you wait for the candle to close back under that breakout area because sometimes it can be a retest. Also it should be a candle of that timeframe you used for a breakout trade.
For example: A coin confirmed a breakout on 4hr timeframe and the breakout price is $10
and lets say you enter the trade at $10.20 after getting your breakout confirmation.
Now if you see a fakeout/sell off, that same $10 area is your invalidation.
once the 4hr candle close back under $10. accept that your plan was wrong and take the exit.
I hope it clears now, Keep learning.
you can't exclude that fakeout/trap thing from the market it can always happen but to avoid that you simply use that breakout area as your invalidation and once you see the price is going down under that breakout area again you simply manage your risk and exit your trade. Much better if you wait for the candle to close back under that breakout area because sometimes it can be a retest. Also it should be a candle of that timeframe you used for a breakout trade.
For example: A coin confirmed a breakout on 4hr timeframe and the breakout price is $10
and lets say you enter the trade at $10.20 after getting your breakout confirmation.
Now if you see a fakeout/sell off, that same $10 area is your invalidation.
once the 4hr candle close back under $10. accept that your plan was wrong and take the exit.
I hope it clears now, Keep learning.
Disclaimer: Includes thrid-party opinions. No financial advice. May include sponsored content. See T&Cs.
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