The moment is ringed. An invented chart, drawn to show the shape. Not market data.
Also searched asfakeout · failed breakout · bull trap · bear trap
What you see
- A wick or a brief close beyond a well-watched level.
- No follow-through on the next candle.
- A close back inside the range.
Why it happens
Edges of ranges are where orders gather: stops of those trading inside, entries of those waiting for a break. A move through the edge triggers both. If nothing follows, the price falls back.
What traders check next
- Whether the candle closed beyond the level or only reached it.
- Whether a second candle held beyond it.
- How many times the level has been tested. An edge that everyone can see is crowded.
Where people go wrong
- Entering on the first touch beyond the level.
- Placing a stop just inside the range, where a retest will reach it.
- Deciding after one fakeout that breakouts never work, or that they always fail.
Questions people ask
- How can a real breakout be told from a false one?
- At the time, it cannot be told with certainty. Traders look for a close beyond the level and for the next candle to hold.
- What is a bull trap?
- A false breakout upward: buyers enter above a level and the price falls back below it.
The words on this page
An explanation for study. It is not advice, a recommendation or a forecast, and a pattern or a situation described here says nothing certain about what a price will do next.