Trading breakouts is a common price pattern and they are a frequent occurrence in any market. There occur at enough frequency that there are breakout traders who only look for that type of price action.

Think about it: Where does a trend start? On the breakout of consolidation so knowing what a false breakout looks like is vital.

While I’ve never seen the stats, the majority are false breakouts where price looks like it is set to run, but then does the opposite. If you are a breakout trader, you must know what a false breakout looks like so you are not hanging on to a trade that is about to rip against you.

Breakout trading is a popular method of trading because if you can get into a breakout that turns into a trend, you have effectively “found the top or bottom” of what could be a long term trend direction.

- See more at: https://www.netpicks.com/false-breakout/

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