A fakeout is also known as a “false breakout” or a “failed break“.
If a support level is broken, that means that the overall price movement is downwards and traders are more likely to sell than buy.
Conversely, if a resistance level is broken, then the crowd believes that price is more likely to rise even higher and will tend to buy rather than sell.
What does in fact happen is that most breakouts FAIL.
Fakeouts can lead to significant losses and is why stop losses should always be used to control risk.
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