Start Learning Forex Now: We Provide Tutorial in EN / 中文.
Forex Malaysia 马来西亚外汇

Trading Breakouts and Fakeouts 突破交易法: Page 8 of 9

Facebook icon

How to Trade Fakeouts

In order to fade breakouts, you need to know where potential fakeouts can occur.

Potential fakeouts are usually found at support and resistance levels created through trend lines, chart patterns, or previous daily highs or lows.

Trend lines

In fading breakouts, always remember that there should be SPACE between the trend line and price.

If there is a gap between the trend line and price, it means price is heading more in the direction of the trend and away from the trend line. Like in the example below, having space between the trend line and price allows price to retrace back towards the trend line, perhaps even breaking it, and provide fading opportunities.

Fakeout Example: Trend line with fading opportunities

The SPEED of price movement is also very important.

If price is inching like a caterpillar towards the trend line, a false breakout may be likely. However, a fast price movement towards the trend line could prove to be a successful breakout. With a high price movement speed, momentum can carry price past the trend line and beyond. In this situation, it is better to step back from fading the breakout.

Strong Breakout. Definitely Ain't No Fakeout!

How do we fade trend line breaks?

It’s very simple actually. Just enter when price pops back inside.

This will allow you to take the safe route and avoid jumping the gun. You don’t want sell above or below a trend line only to find out later that the breakout was real!

Using the first chart example, let’s point out possible entry points by zooming in a little.

Possible entry points for trading fakeouts.

Chart Patterns

Chart patterns are physical groupings of price you can actually see with your own eyes. They are an important part of technical analysis and also help you in your decision-making process.

Two common patterns where false breakouts tend to occur are:

  • Head and Shoulders
  • Double Top/Bottom

The head and shoulders chart pattern is actually one of the hardest patterns for new traders to spot. However, with time and experience, this pattern can become an instrumental part of your trading arsenal.

The head and shoulders pattern is considered a reversal. If formed at the end of an uptrend, it could signal a bearish reversal. Conversely, if it is formed the end of a downtrend, it could signal a bullish reversal. Head and shoulders are known for generating false breakouts and creating perfect opportunities for fading breakouts.

False breakouts are common with this pattern because many traders who have noticed this formation usually put their stop loss very near the neckline.

Fakeout Example: Head and shoulders formation

When the pattern experiences a false breakout, prices will usually rebound. Traders who have sold the downside breakout or who have bought the upside breakout will have their stops triggered when prices move against their positions. This usually is caused by the institutional traders who want to scrape money from the hands of individual traders.

Head and shoulders formation and fakeout

In a head and shoulders pattern, you can assume that the first break tends to be false.

You can fade the breakout with a limit order back in the neckline and just put your stop above the high of the fake out candle.

You could place your target a little below the high of the second shoulder or a little above the low of the second shoulder of the inverse pattern.

The next pattern is the double top or the double bottom.

Traders just love these patterns! Why you ask? Well it is because they’re the easiest to spot!

When price breaks below the neckline, it signals a possible trend reversal. Because of this, plenty of traders place their entry orders very near the neckline in case of a reversal.

Double top formation fakeout

The problem with these chart patterns is that countless traders know them and place orders at similar positions. This leaves the institutional traders open to scrape money from the commoner’s hands.

Double top formation and fakeout

Similar to the head and shoulders pattern, you can place your order once price goes back in to catch the bounce. You can set your stops just beyond the fake out candle.

What kind of market should I fade breakouts?

The best results tend to occur in a range-bound market. However, you cannot ignore market sentiment, major news events, common sense, and other types of market analysis.

Financial markets spend a lot time bouncing back and forth between a range of prices and do not deviate much from these highs and lows.

Ranges are bound by a support level and a resistance level, and buyers and sellers continually push prices up and down within those levels. Fading the breakouts in these range-bound environments can prove to be very profitable. However, at some point, one side is eventually going to take over and a new trending stage will form.

如何交易假突破

       为了进行反向突破交易,你需要知道潜在的反向突破会发生在哪里。

       潜在的虚假突破通常见于由趋势线所组成的支撑或阻力位、技术形态或前日高或日低水平。

趋势线

在反向突破交易中,我们需要始终记住,趋势线和价格之间应该存在一定空间

       如果趋势线和价格之间存在缺口,这意味着价格沿着当前趋势走势有些过,并远离了趋势线。如下图所示,价格和趋势线之间所存在的空间,这促使价格随后朝着趋势线目标回撤,甚至跌破趋势线支撑,这为反向突破提供了非常好的机会。

价格运动的速度也非常重要

       如果价格像毛毛虫一样朝着趋势线方向运动,假突破很可能出现。不过,价格沿着趋势线方向快速移动可能证明突破的有效性。由于价格运动的速度很快,动能能够促使价格快速突破趋势线。在这一情况下,最好不要尝试反向突破交易。

       我们该如何进行反向突破交易呢?

       实际上非常简单。只需要在价格回撤至趋势线下方即可(这里我们选取的是下降趋势线)。

       这样操作将更为保险,并避免你出现判断错误的情况。你也不想看到,价格运行至趋势线下方或上方卖出,却发现突破是真实有效的吧。

       借用第一个图形的例子,让我们来看看可能设置的入场点位吧。

图形形态

       图形形态是你仅凭自己的双眼都可以识别的价格形态。它们是技术分析的重要组成部分,也能够帮助你做出正确的交易决策。

       假突破容易在两种普遍的图形形态中出现:

           ● 头肩形

           ● 双顶/双底

       头肩形态的识别对于交易新手来说是最难识别的。不过,通过经验的积累,这一形态能够成为你的交易工具箱中的厉害武器。

       头肩形态是一种反转形态。它形成于上升趋势的末期,可能意味着价格走势将反转并走低。反过来说,如果它形成于下跌趋势的末期,则可能发出看涨逆转的信号。头肩形态易于出现假突破的情况,这也为反向突破交易提供了非常好的机会。

       假突破经常出现在头肩形态中,因为多数交易者都会注意到这一形态,进而将止损设在非常接近颈线位的地方。

       当出现假突破时,价格通常会反弹。那些在价格跌破颈线位后选择做空或突破颈线位后选择做多的交易者,当价格沿着他们的头寸方向反向波动时,他们都有可能被打止损。这一情况通常由大型的机构交易者所致,这些机构交易者目的就是从广大散户那里获利。

       在头肩形态中,你可以假设首次突破行情为假突破。

       你能够进行反向突破交易,将限价订单设在颈线位下方水平,并将止损设在突破颈线位蜡烛线的最高点。

       你也能够将获利目标设在头肩顶右肩高点下方,或倒头肩形态右肩低点上方水平。

       下一形态是双顶双底。

       交易者们非常喜欢双顶或双底形态,为什么呢?很简单,因为它们易于识别。

       当价格跌破颈线位,则发出走势可能出现逆转的信号。有鉴于此,众多的交易者将入场单设在非常接近颈线位的地方,以期价格反转的发生。

       这一形态的问题也在于,有太多的交易者都能够识别该形态,并将入场单设在类似的位置。这也为机构交易者从广大散户那里牟取利润提供了机会。

       和头肩形态类似,你也能够在价格反向运动后设置入场单,以抓住价格的反弹机会。你只需要将止损设在出现假突破蜡烛线最低点或下方水平即可。

       你可能在问,我应该在什么样的市场中进行反向突破交易?

       最理想的答案是,在区间波动市场中。不过,你也不能够忽视市场情绪、主要的新闻事件、常识、以及其他的市场分析方法。

       金融市场在大多数时候都是维持在区间以内做来回运动,通常不会偏离高点和低点太远。

       交易区间由支撑位和阻力位所限定,在买方和卖方的彼此博弈中,价格维持在阻力位和支撑位所构成的交易区间内做来运运动。在这一市场环境下做反向突破交易能够为交易者提供非常可观的收益。不过,在某一节点,单边市场行情最终可能取代拉锯行情,新的趋势可能随之形成。