False Breakouts: What they are and how to Predict them

[heleen]

How is this “predicting”, if you have to wait until it fails? When will you know if it’s a real BO then?

[CaosBoyCathian]

Prediction. The poor man’s game. All in on time.

[heleen]

So…. What to do then? Never get in at the first BO?
Or… get in but only as a scalp, set a fixed take profit sell order at a relatively low target, say 1R and hope the false BO reaches it? Then wait for a second entry, if it appears to be a real BO? Maybe a buy set up when it pulls back? Or a 3BP?
And, what about the second BO if the first was a fake BO? Same story? Same chance of happening again?

[xxdeatheater]

Tupperware: What’s a support and resistance ?

[allan-mccombs]

If you want to talk about volume, then the volume should be visible for the entire time period of the chart, you only showed us an itty bitty green part. A vertical line on the volume spike to meet the price action can help make the point. Thank you for not playing music.

[TheEarthsEyes]

Why does the high volume signal that it will fail?

[gavinhill]

The market is a visually based model, when you don't use visuals, you provide a poor model... provide visuals or just don't bother

[japexican]

Isn’t it basically riding the wave, everyone’s trying to predict if the stock will go up and down, buyers+ sellers, if you can get one side to give either buyers to buy the stock goes up or sellers to sell the stock goes down, a false breakout happens when a couple buyers buy and the stock market begins to go up and then an amount of around the same start to sell which immediately brings down the stock, now if those sellers are able to scare other sellers then you’ll see that jump in volume which is basically a bunch of people saying we think the stock market is going down buy my stock please thus all these sell calls are given causing an explosion in volume but really the volume could be for either direction