Lessons › Market structure › False breakouts
World 2 · Market structure · lesson 13 · level 3
False breakouts
Sometimes price jumps out of the box and falls right back in, and that trap can cause a fast move the other way.
What it is
Price broke above resistance, then fell straight back below it. A trap.
Your task in the app
Is this breakout real? Then decide: buy, sell, or wait?
How often it worked
| Market | Times found | Target first | Stop first | Went nowhere |
|---|---|---|---|---|
| India (NSE) | 12 | 33% | 67% | 0% |
| United States | 12 | 33% | 67% | 0% |
| Japan | 4 | 100% | 0% | 0% |
| Crypto | 118 | 39% | 50% | 11% |
| Forex | 10 | 30% | 50% | 20% |
| Commodities | 3 | 0% | 100% | 0% |
Counted on real past charts by the Trading Class research engine, 159 cases in all. Past odds, not a forecast.
Read more on the False breakout pattern page.
Goal of this lesson: Recognize a false breakout and understand why it traps traders.