Fakeout

Fakeout is a deceptive move in financial markets where the price appears to break out from a trading pattern or range but quickly reverses direction. This can mislead traders into making premature decisions, such as entering or exiting positions based on the false signal. Fakeouts often occur in volatile markets and can be triggered by market manipulation or sudden shifts in sentiment. Recognizing a fakeout requires careful analysis of volume, market context, and potential catalysts. Understanding fakeouts can help traders avoid losses by waiting for confirmation before acting on perceived breakouts.