How to Spot False Breakouts

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Everything is described on the chart.

Another thing are bull traps. These happen when there is NO retest of resistance and volume may be lacking. You can always have an uptrend without an actual "breakout." Breakouts clarify STRONG uptrends that are likely to continue.

Also, notice how when the volume peeked we formed a doji. This means that a lot of people came in and took profits because they knew the trend was weak.

This one is very weak and will be shot down. Hope this helps!

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ملاحظة

Update on what's going on here. We see that It fell from the bearish channel. And there are no signs of strength, so the movements here are still bearish too me. I expect there to be a BULLISH DOWNTREND. and then a possible break upwards.

I'll update to see if these analysis actually come true. And they may not. But as a trader you always have to hypothesize and create arguments, it will make you better over time!

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ملاحظة

Glad this happened because I wanted to show an example of a bull trap using candle stick analysis.

In each candle stick you see a lot of volatility with with high highs, low lows and small bodies. This thing passes every test of a bullish breakout EXCEPT an increase in volume (as well as concise candle sticks). Candle sticks tell you sooo much about what is going on. Look at what I talk about in the chart. When I say "test" and retest" I mean the wick passing through the resistance line and is being rejected. When there is rejection, that means that there is literally a fight between bears and bulls, trying to drive up the price or either lower it. If there is no rejection/fight, then that would be a bull/bear trap. And very quickly will the bears come in and take profit and drive the price down if it becomes too high.

One of the most important aspects to watch is VOLUME. If it lacks volume, then it lacks buying/selling pressure. This makes that trend weak. U no want no weak trend. U want scrong trend.

I still expect this to continue to trade sideways and have another downtrend before we go upwards.

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ملاحظة

That bull trap above ending up coming down. But I wanted to show the other teaching point on the progress of this coin. Earlier I thought we were going to get a bullish downward channel. But i was DEAD WRONG.

In fact, the opposite happened. What we got was an Upward Bullish trend! And on this analysis I show how to spot the breakout of the trend if you didn't already have money in this coin. Everything that I described before that happened on false breakouts or bearish channels, DOESN'T happen here. And look at that, we get our strong uptrend.

It passed the candle test and volume later gained, 2 strong confirmations, so we BUY into STRENGTH. And see where it leads us!

If you notice at the top of the run, you'll see where NEO peaked at. Around $73.60. I predicted that it would hit $73.32. It could possibly do higher on this run, but I haven't really even checked into that. If you want to check out that prediction, here is the link.