How to Identify Breakout vs. Fakeout Using Price Structure.

In trading, one of the most exciting yet confusing moments happens when the price approaches a key support or resistance level . Traders eagerly wait for a breakout, expecting strong moves and potential profits. But often, what looks like a breakout turns into a fakeout , trapping traders and causing unexpected losses . So, how can you identify the difference between a real breakout and a fakeout ? The answer lies in carefully reading price structure . What is a Breakout? A breakout happens when the price moves decisively above resistance or below support, often accompanied by strong volume and momentum. This usually signals the start of a new trend or continuation of the existing trend. Example: Price breaking above a consolidation range with strong bullish candles. A new high forming with higher lows supporting the move. What is a Fakeout? A fakeout happens when the price breaks above resistance or below support but fails to continue. Inst...