Let me paint you a picture.
It’s 3:00 a.m. You’re half-asleep, staring at your chart. Suddenly… BOOM. Price spikes above resistance in your favorite forex pair. Your pulse skyrockets. You FOMO in with a buy order.
Two minutes later… the candle slams back down into the range, and you’re stopped out. Again.
Welcome to the soul-crushing world of chasing breakouts in range-bound markets.
I’ve been there. I’ve donated thousands to the market gods trying to “catch the big move.” And every time, the same thing happened:
I got whipsawed.
So let’s talk about why chasing unconfirmed breakouts is financial suicide—and how you can finally stop feeding your account to the market like an all-you-can-eat buffet.
🤔 Why Ranges Are So Ruthless
Here’s the cold truth:
Markets spend 70-80% of their time ranging.
That means price bounces between support and resistance levels like a tennis ball. And every time it fakes out of the range, it’s usually just:
✅ Stop hunting
✅ Liquidity grabs
✅ Market makers screwing with impatient traders
If you’re chasing breakouts without waiting for confirmation, you’re basically volunteering to be liquidity.
🚨 The Anatomy of a Fake Breakout
Here’s how a fakeout usually goes:
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Price finally breaks out above resistance.
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Everyone piles in.
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Volume looks “kinda good,” but not great.
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Price reverses hard and dumps back into the range.
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Stops get annihilated.
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Smart money laughs all the way to the bank.
The problem? The first breakout is often just a probe—a test to see where the weak hands are hiding.
Why Traders Keep Chasing Anyway
Because:
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FOMO is real.
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Big candles look exciting.
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You think, “This is the breakout I’ve been waiting for!”
Been there. Done that. Paid the tuition fee.
✅ The Smarter Way: Wait for Confirmation
Let’s get practical.
Instead of blindly chasing the first spike:
Wait for price to confirm the breakout.
Here’s how:
1. Let the Candle Close Outside the Range
Don’t trade mid-candle. Wait for the session to close:
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15M or 1H charts for intraday.
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4H or Daily for swing trades.
If price closes firmly outside the range, it’s your first green light.
2. Watch for the Retest
This is where most traders blow it.
Smart money knows price often comes back to retest the broken level.
✅ Upward breakout → price comes back to test old resistance as support.
✅ Downward breakout → price retests old support as resistance.
3. Enter on Rejection
Look for:
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Pin Bars
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Engulfing candles
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Strong rejections
Only then do you enter.
4. Keep Stops Logical
Set stops:
✅ Just beyond the retest zone
✅ Not random numbers
This way, if price collapses back into the range, you’re protected.
Real-Life Example: EUR/USD Fakeout
EUR/USD is ranging between 1.0950 and 1.1000.
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Price spikes to 1.1010.
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Everyone buys the breakout.
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Ten minutes later, price dumps back to 1.0960.
Classic fakeout.
But the patient trader waits:
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Price breaks above 1.1000.
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Closes firmly at 1.1020.
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Retests 1.1000.
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Prints a bullish Pin Bar.
That’s your confirmation. Now you enter, targeting the next resistance.
Why This Works
Because smart money creates fakeouts to shake you out.
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They hunt stop-loss orders.
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They flush out impatient traders.
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Then they ride the real move once weak hands are gone.
By waiting for confirmation:
✅ You avoid being the weak hand.
✅ You enter only when real momentum is behind you.
✅ Your account thanks you.
My Hot Take
Trading without confirmation is like trying to run across a busy highway blindfolded.
Sometimes you make it. Mostly you get flattened.
Be the trader who waits. Let everyone else donate money on fakeouts. Because:
It’s not the first breakout that matters—it’s the one that holds.
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