How to Recognize False Breakouts

In today's video David Jones will be talking about one of the worst trading scenarios and that is the False Breakout.
Textbooks say that if a trend line breaks, then that's it - another direction is certain. Well, that's not exactly true. Patience is key.
Making the decisions in the right time at the right price makes all the difference. This video will help you make that judgment with more knowledge about the different possible scenarios.

Download the free native mobile apps now:

Subscribe | Select the Alarm Bell | Hit the Thumbs Up | Share | Comment

At Trading 212 we provide an execution only service. This video should not be construed as investment advice. Investments can fall and rise. Capital at risk. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

[simmsman]

I love this guys teaching methods, he's very calm and precise

[baffledAndConcerned]

Videos like these are truly invaluable to struggling but driven people. Thank you mate.

[vinodkumarpv]

Trading 212 is one the best channels for learning to trade in the stock market. The honesty and sincerity of the presenters are like a fresh breath of air compared to so many channels who just boast of their achievements and make it look easy or make it look so hard that you are forced to buy something they are selling. Keep up the good work and hoping for an interactive webinar soon. :)

[claudiam]

Delighted to have found you. Your explanations are concise and very helpful!

[matchroom.futbol]

this is the only channel i have found to be really detailing and educational

thank you for the good tutorial

[NavShay]

I like the calm attitude of David, he makes it look easy

[eddyvideostar]

Trading 212: David: I sincerely appreciate your effort in regard to this video, especially where you apply the ultimate in common sense to trading as it should always be.

At the video time of 14:10 minutes, even you stress that this doesn't work all of the time (to be fair, 50/50 percent). This may sound trite, but this is the most salient sentence of all trading training videos: the reason we apply stops and profit targets -- for, *we will always know that these will work -- ALL of the time.*

[vk]

I know I didn't lose a lot of money but the false breakout got me. Didn't wait for the evening star confirmation and convinced myself the trade would go in my favor. My lot size was only a 0.05.

[AswinHaridasOne_]

I've watched only 2 videos of you sir, and I'm already a fan 👍. Easy to understand and nice way of explaining.

[ricksreels]

Very informative and helpful - even 2 years later. Thankyou!

[krach]

Summary: The answer to "How to recognize false breakouts" is "You wait a bit". The title should really be, "How to profit from false breakouts". Much better clickbait wording and the answer is actually in the video. The answer: "If the support gets broken, you wait a bit to verify. When it comes back to the resistance (previous support), you enter a position with a stop-loss just below the resistance." There you go. Saved you a bit of time. Now learn something much more useful like RSI.

[gfiveforfun]

Love you to hear more. You are the first person I found that speak teachnicaly about binary trading

[Zonezero]

Thank you!! It's good stuff people like yall do. Helping a lot of traders (including me) with this

[rombusworkmoney]

Wow! Youtube has just brought me back your channel, many months after I added your channel to my list of sources to learn from (and your channel is the first in that list) :) And the timing is good as I have learned much since then.

[edwingoh]

Trading breakouts
1.) See if price breaks support or resistance line.
2.) Wait for next candle confirmation to enter the breakout.
3.) Stop loss place just below or above the support or resistance line.

Trading false breakouts
1.) After price breaks support or resistance line wait for next candle confirmation to enter the price reversal.
2.) Stop loss place just below or above the support or resistance line.

i saw your youtube video tutorials on trading breakouts and false breakouts, these are the rules i understood from your videos on breakouts and false breakout.
Would it be better to set a buy stop position just above the breakout candle during a breakout on a resistance line at the same time set a sell stop position just below the resistance line candle, from this if a false breakout occur by sell stop position would be triggered and if a breakout took place in this scenario my buy stop position will be triggered and the trade would still go in my favour whether it continues to go up into a breakout or goes back down into a false breakout.

[AB-qvku]

Great video. Most times the false breakout is what actually happens. Unless the breakout is confirmed with major momentum and on a fractal price zone.

[keithp]

Great videos-Ive learned more in a week watching your vids than I have in 6 mos of other vids. Thanks!

[JerryOSmith]

Hello David ! Really enjoy your education videos. Very down to earth teaching.

[damirhorvat]

Such a quality content. Very self explanatory

[perrysaico]

The most informative and educational channel!! Learning a lot from this. Thank you very much! :)