Investment Pitfall Guide | Identifying False Breakouts

In investment trading, false breakouts can be a frustrating trap! Learning to identify them is crucial.

False Breakout: Although the price seems to have broken through the resistance level, the subsequent candlestick returns to the resistance area, which is like the market setting up an "optical illusion" for us.

True Breakout: After the price breaks through the resistance level, confirming through a pullback, and then applying further technical checks can help it develop more steadily upwards.

Mastering these identification methods can help us avoid blindly entering during false breakouts and reduce losses. However, investment risks are omnipresent, so we must also combine other indicators for a comprehensive judgment.