3 Signs of Price Reversal & Fake-Out Breakout

Questions:

– Fake-Out Breakouts (price reversals)

o The concern is that we will buy/sell the breakout of the trading range and then the price reverses and takes all of our money along with it.

o How do I anticipate it coming?

 Look at the level you are going to be trading with.

• Is it yellow line? They are double-tops/bottoms, so this is going to hold more often.
• Is it a trend line? Is it the fast chart, slow chart? Which type of trend line is it?

o Slower timeframes will hold more often so expect the fake-out when you use trend lines on slower charts

• Momentum Overbought/oversold will increase your likelihood of fake-out

o Long trade, looking for momentum curled up from the bottom. If its overbought, this long trade has high potential to be a fake-out.

o Short trade, looking for momentum to be curled down from the top, and a short trade with oversold momentum is begging for a fake-out breakout.

• Speed of the market is a HUGE determining factor

o The slower the speed, the easier it is for the price to stall and reverse
o The greater the speed the more volume is in the market and the more likelihood of the market moving through support and resistance.

• Overall Volume for the day

o Remember that during days of August, end of the year, and end of Q1 we are always going to see lower volume

o Lower volume = less consistency
o Less consistency = more fake-outs
o Be aware of the TYPE OF DAY you are trading
o Lower volume days will always show more fake-outs.
o Every fake-out breakout is now another opportunity to trade with a simple reversal pattern

• Fake-out to the up-side is a failed breaker pattern
• Failed break patterns are now 2 –step short pattern

– How much money do you need to trade with us?

o $1,000usd is all you need to get trading with us!
o Save your money on the Advanced Course so you can make that $1000 turn into $10,000.
o Entire section dedicated to 1-contract trading in the ADV

– How do you measure speed with the Pace of Tape and overall Volume?

o Pace of tape measures the speed of the orders coming into the market
o More info on our blog under trade room resources
o Total volume counts ALL the volume throughout the entire day, so it’s a very broad picture of the market

 How do I know if the volume came early today, or late today?

For more on price reversals follow these links:

• Maxamize Profits With Trade Management