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What are False Trend Breakouts

2020 5/31
What are False Trend Breakouts

This week’s strategy video covers a very important scenario that all traders come across – trend breakouts that don’t turn out as expected.
Textbooks say that if a trendline breaks, then that’s it – another direction is certain. David explains why this isn’t necessarily true and he gives us illustrations and examples of the so-called false breakouts and shows you how to identify them.

Making the distinction between trend reversals and false breakouts can make all the difference in your portfolio as they usually happen at critical levels. These can be where support and resistance are determined or the boundaries of trend channels making it harder for traders to determine what’s next. This video will help you make that judgement with more knowledge about the different possible scenarios.

At Trading 212 we provide an execution only service. This video should not be construed as investment advice. Investments can fall and rise. Capital at risk. CFDs are higher risk because of leverage.

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  • badi ejied says:

    thank you for this great video really helped me , can you make a video about short term trading or binary option ? PLZ

    • Trading 212 says:

      Hi, Badi. Your comment will be taken into consideration. Thanks for posting it.

  • elijah tapiwa chipato says:

    Hie Dave why dont you just make a book with all these things??? I really like the way you explain it’s very easy to understand I dont know if it is gonna be easy as well to apply.

    • Trading 212 says:

      Hi, Elijah. Your results depend on your trading strategy and discipline, as well as on the market.

  • محمد توكل says:

    Its a great hint and good explanation for me, but can you explain how to avoid false support or resistance line breakouts

    • Trading 212 says:

      Hi there. You can take a look at this video: https://youtu.be/yGfAUia6b_g.

    • eddyvideostar says:

      There is no way of knowing for sure: No guarantee is ever given, no matter how sanguine or logical the situation may be.

  • JA Villalba says:

    Hi Dave. Many thanks for your weekly videos. I love them.
    Could you please at some time cover concepts or strategies related to Elliott Waves?
    Cheers.

    • Trading 212 says:

      Hi there. Your suggestion has been noted. You can take a look at the “What are Elliott Waves?” section in the Learning Centre at http://www.trading212.com/en/Technical-Analysis?id=6.

    • JA Villalba says:

      Thanks for your suggestion. Oh! I did it already. I also read the best seller of Prechter & Frost, but I still don’t see it clear whether Elliot Wave theory in practical cases is useful or not. Maybe you can help

  • Даниил Скарин says:

    Thank you!

  • Zakirhussein says:

    Hi, Can you make a video of Fibonacci + moving average strategy please.

  • Ayush Rathi says:

    What other tools should be used with this to justify this is not false breakout ?

  • SHAIKH UMAR says:

    had u made a video on how to use MACDs, If not plz make it.

    • Trading 212 says:

      Hi, Shaikh. Thanks for reaching out and for sharing your suggestion. It will be taken into consideration, as always. Watch this space for new videos every week.

    • Scorpio Indigo says:

      Trade naked fam!!! fuck indicators they catch the trend late…learn how to read candle sticks!!!!

    • Shadman Sudipto says:

      Scorpio Indigo also moving averages help a lot

    • eddyvideostar says:

      To Shaikh: Scorpio Indigo has some issues regarding his mental condition. How can one listen to a person as this? Indicators, when utilized correctly, saves the trader from too early anticipatory failing entries.

  • VEKTR FPV says:

    That was very clear and useful for me. Thank you!

  • Desiree King says:

    awesome thank you!

  • Silvian Basha says:

    Very nice lesson

  • Alonzo Rogers says:

    Had this happen to me just this morning…blew my whole account

  • Kazzzzzo says:

    You have a double top at the end of the video. Is that indicating trend reversal?

    • David Jones says:

      Hi – good spot. It if broke that $1216 level then yes. I think it actually did in the end but didn’t follow through. You can’t win them all.

  • Shax Rashid says:

    By far the most informative channel. cleared alot of my misconceptions and gave me more confidence on my trades.

  • Satya Narayana says:

    what is the trading platform you use… it looks like u r using CTRADER…..!!!! am I right?

  • Marcelo Eller says:

    David. Can you make a video about Elliot Waves? Thanks!!

    • bara tech says:

      elliot wave is very hard trend line is better for beginner

  • Louis Hibbs says:

    some traders use trend lines on RSI etc..

  • Ricardo Heisinger says:

    Super Useful, Thanks David!!

  • bttypst says:

    if the “broke below” a trend line, then does the slope of the trend line decrease and follow that new low? I can never quite grasp where the trend line actually goes and when to move it in accordance with price action

  • The Misunderstanding says:

    good lesson, very clear ….

  • Stacey Hall says:

    David, quite a few video from you now. You always are so good a explaining things in great detail!

  • Dejvid Dejvich says:

    and what if it’s not a false trend,but new bearish trend,how to know?

  • eddyvideostar says:

    At 2:36 minutes: It is good to keep in mind the horizontals as well as the diagonals as the trader in the video indicated. This helps to keep the bigger picture.

  • biswarup biswas says:

    thanks david

  • XULTAIF says:

    I hate false breakouts 😠

    • 0CT7 16 says:

      ANDYWAFFLEZ on Larry Hoover

    • Luka K says:

      Who doesn’t

    • Ravi kiran says:

      @Luka K when false breakout happens then i Book small losses and reverse my trade

  • Amit Lakhera says:

    I trapped in this pattern today and hit stop loss, but again I regained it. Very nice and useful information. Love from India David🙂

  • Omar E says:

    he got it all wrong because it wasn’t a trend, it was ranging.

  • asad mir says:

    David your explaning ways are great and i love it !
    however its just a shame your trading platform reputation is a bit on the lowside otherwise i would use trading 212 myself !

    • Trading 212 says:

      Trading 212 is quite a reputable broker. All traders and investors are always treated fairly. Should you have any questions or concerns, please feel free to start a live chat and address them – http://www.trading212.com/en/Contact?startchat. The customer care team members will gladly help.

  • Kate Ngulinga says:

    Brilliant I love that infact I have tested that and works perfectly fine man your a genius I never think of that big ups sir😎

  • MoneyManFernando says:

    Good video. Thanks

  • Zeeshan Ahmed says:

    @david Jones, I love your videos! Honest. Soon you will make me trading 212 customer.. 😇
    @zish

  • Darin Wade says:

    Some times?..False breakouts result in reverse splits..watch your charts and your performance of your postions of your portfolio..

  • Darin Wade says:

    S&P500 in the USA is heading for longer than expected sale trend now is the time to develop strategies to avert losses which I have developed 🌈🌈🌈🌈

  • Muhammed Asif Iqbal says:

    Good very good

  • Gypsy Malone says:

    Where has mr Jones gone? I only watched his videos

  • Ian Woodward says:

    Clear and precise as always. Thanks

  • Macam2macam says:

    False breakout always kills me. FFFFFFFFFFFFFF.

  • ThanoΣ 1914 says:

    Love your channel. You guys make trading easy to learn

  • Honchoeric says:

    can this work on 1D and 4HR charts?

  • ahmed bashiir omar says:

    thanks

  • Santiago Flórez Toro says:

    Audusd this week. Should have watched this video last week. Bagger

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