False Breakout

This false breakout indicator detects false breakouts in real time. A false breakout occurs when the price moves through a certain level but doesn't continue to accelerate in that direction. This is because the price does not have enough momentum and the buying interest at this level is not high enough to keep pushing the price in that direction. Instead, the market reverses! All breakout traders are now forced to close their positions at a loss. However, contrarian traders that have identified this false breakout do get a perfect entry for a great reversal trade!False Breakout is one of the most important price action trading patterns to learn because it can help traders understand whether a breakout is valid or false.

What is a False Breakout?

A false breakout occurs when the price moves through a certain level but doesn't continue to accelerate in that direction. Instead, the market reverses!

Watch this video to understand the indicator even better

https://www.youtube.com/shorts/ifm1WvBXX24

How to use

The signals mean that a potential false breakout is identified. Hence we are looking for a possible reversal. To make use of the signals, make sure that you analyze previous highs/lows to understand from which level the indicator has identified a false breakout. Using our SMC indicator is a good way to understand the current market structure, which can help you identify key areas. These signals can be hugely useful, look for liquidity grabs below or above key levels and use the signals to confirm a reversal trade.Use this indicator together with our free breakout probability indicator which can help you to confirm your trades.

• Identify False Breakouts
• Identify Reversal trades

Watch when we backtest the False Breakout Indicator with our Curved Stop Loss