FOREX THEORY
How to Trade Fakeouts
Chart Patterns (Last Part)
Similar to the head and
shoulders pattern, you can place your order once price goes back in to catch
the bounce. You can set your stops just beyond the fake out candle.
What kind of market should
I fade breakouts?
The best results tend to
occur in a range-bound market. However, you cannot ignore market sentiment,
major news events, common sense, and other types of market analysis.
Financial markets spend a
lot time bouncing back and forth between a range of prices and do not deviate
much from these highs and lows.
Ranges are bound by a
support level and a resistance level, and buyers and sellers continually push
prices up and down within those levels. Fading the breakouts in these
range-bound environments can prove to be very profitable. However, at some
point, one side is eventually going to take over and a new trending stage will
form.
 Similar to the head and shoulders patter...){kind=link}
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