False breakouts in forex trading occur when the price moves outside a significant level, such as support, resistance, or a trendline, but then fails to sustain that movement and reverses back into the original range. This phenomenon often traps traders who enter positions based on the initial breakout, leading to losses if the price reverses sharply.
Inside Bars false breakouts trading strategies/examples
https://giantpips.training/trading-strategies-and-tactics/The following are, in my opinion, the most crucial levels that traders should search for while trading this strategy:
-Areas of supply and demand, as well as levels of support and opposition
-Fibonacci levels of retracement, specifically the 50% and 61% levels.
-21 trend lines and moving averages in markets that are trending
-In markets that are range-bound, horizontal levels
This is an illustration of how to trade inside bar fake breakouts in a market that is trending:
The market was heading downward, as you can see in the above chart, which suggests that sellers are in charge of the market. If you choose to sell the market close to the resistance level, the odds will be in your favor.
When to enter the market is the dilemma, though. And where should my stop loss be placed?
The market will accept your stop loss and move in the anticipated direction if you enter the market aggressively before the mother candle breakout and place your stop loss above it.
View the following illustration:
Big players target beginner traders’ stops before driving the market lower, as shown above. If your stop loss was close to the resistance level, you would also be out; if you do not know why, it is only because you fell victim to their stop method.
You will comprehend what transpired in the market and simply profit from this deception rather from being caught by it if you are experienced in trading inside bar false breakouts. View the following example:
We had a nice selling chance because of the inside bar false breakout, as shown above.
There should be no excuse for not accepting the position if you can see this setup and comprehend the psychology underlying it.
