Assume the red horizontal line is range low. Would the candle marked by a red arrow be considered a confirmed false breakout as taught in today's lesson?
Understand the Problem
The question is asking whether the candle marked by a red arrow can be classified as a confirmed false breakout in the context of a trading lesson, based on the placement of that candle relative to a red horizontal line indicating range low.
Answer
Yes, it's a confirmed false breakout.
The candle marked by a red arrow is a confirmed false breakout.
Answer for screen readers
The candle marked by a red arrow is a confirmed false breakout.
More Information
A false breakout occurs when the price temporarily moves outside a defined level, like a trendline or range, and then returns back. This is a common trap in trading to trigger stop losses before moving in the opposite direction.
Tips
A common mistake is not waiting for confirmation, leading to entering positions too early. Always wait until the price consistently returns to the range.
Sources
- How to distinguish a real breakout from a false one - Forexlive - forexlive.com
- How to Identify and Trade False Breakouts - YouTube - youtube.com
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