Breakouts and Fakeouts
Not every breakout is real. Sometimes, prices just poke out and return, known as a fakeout.
To avoid fakeouts:
- Confirm with the chart nature.
- Wait for the candle to close outside the channel. If the close is moving away, wait for a retest.
- Also, wait for additional price action confirmations.
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Parallel Channel Chart Pattern vs. Trendline Trading
While trendlines show one side of price movement, channels give a complete range — support and resistance. That’s why channels offer better entry and exit clarity.
