Many times people ask what a false breakout is...
🎈When you were a kid, you told your playmate that you were going downstairs to play, but your playmate saw you just step out the door and your mom pulled you back in. This is a "false breakout."
You originally stepped out, but then faced uncontrollable factors that led to unexpected results 😄
Just like in trading, suppose the support for a trading pair is 200. If it breaks below 200 and then, shortly after, the price returns above 200, the expectation was to turn bearish after the break, but if the price returns above this support level of 200, can I consider it a false breakdown?
If the resistance for a trading pair is 100, and it briefly breaks above only to fall back within 100, can I consider it a false breakout? #BTC
Does a false breakout guarantee a 100% accuracy in reverse trading? Trading is about responding, not about absolutes. What you need to consider is whether the risk-reward ratio is appropriate, rather than pursuing a so-called high win rate.
🎈When you were a kid, you told your playmate that you were going downstairs to play, but your playmate saw you just step out the door and your mom pulled you back in. This is a "false breakout."
You originally stepped out, but then faced uncontrollable factors that led to unexpected results 😄
Just like in trading, suppose the support for a trading pair is 200. If it breaks below 200 and then, shortly after, the price returns above 200, the expectation was to turn bearish after the break, but if the price returns above this support level of 200, can I consider it a false breakdown?
If the resistance for a trading pair is 100, and it briefly breaks above only to fall back within 100, can I consider it a false breakout? #BTC
Does a false breakout guarantee a 100% accuracy in reverse trading? Trading is about responding, not about absolutes. What you need to consider is whether the risk-reward ratio is appropriate, rather than pursuing a so-called high win rate.