Trading breakouts can help you make good profits in crypto. But sometimes, a breakout is not real — it's a trap. That’s called a fakeout. Here's how to trade breakouts the smart way and avoid fakeouts.
What is a Breakout?
A breakout happens when the price of a coin goes above resistance or below support. This can mean a new trend is starting.
(for people who don't know 👇)
Resistance = A level where price often stops going up
Support = A level where price often stops going down
What is a Fakeout?
A fakeout looks like a breakout at first, but then the price quickly turns back. Many traders get trapped and lose money if they enter too fast.
How to Trade Breakouts Safely
1. Wait for Confirmation
Don’t jump in right away. Wait until the candle closes above resistance or below support. This shows the move is real.
2. Look at Volume
A real breakout usually has high trading volume (lots of buying or selling). If volume is low, it may be a fakeout.
3. Wait for a Retest
Sometimes, after breaking a level, the price comes back to test it. If it bounces from that level again, it’s a good time to enter.
4. Use a Stop Loss
Always set a stop loss. This will close your trade if the price goes the wrong way. It helps protect your money.
5. Avoid Bad Market Times
Breakouts work better when the market is active. Don’t trade breakouts during quiet or slow times.
In Short
Breakouts can be great for trading, but only if you’re careful. Wait for signs that the move is real, watch the volume, and always protect your trades. This way, you can avoid fakeouts and trade with more success.
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