💭 How to distinguish between the real direction and the deceptive movement?
📌 One of the most common mistakes beginners make is entering trades based on movements that seem strong, but are actually "deceptive movements" or what is known as Fakeouts.
1. What is a Fakeout?
It is a false breakout of a support or resistance level, misleading traders into believing in a new direction, then the price quickly reverses.
2. How do you identify the real movement?
🕯Volume: The real trend is usually accompanied by an increase in trading volume.
🕯Closing outside the area: A momentary breakout is not enough; we need a strong candle closing outside the level.
🕯Retest: The correct movement usually returns to test the broken level before taking off.
3. Helpful tools:
🕯RSI Indicator: Avoid entering if it is in overbought areas.
🕯VWAP or moving averages: Ensure that the price is moving in the same direction as the indicators.
💡Practical example:
Resistance breakout + strong closing bullish candle + high trading volume + testing resistance as support = confirmation of the trend.
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🎁 Next lesson:
How to use capital management to protect your profits and reduce your losses?
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