🚨Avoiding Fake Outs Thread🚨
(1/6) A fake out is when a trader sells a particular asset and the asset value increases without them. These can be some of the most frustrating losses, here is what I do to avoid them:
(2/6) It is important to understand that fake outs are a part of the game. There is no single indicator or strategy that will completely avoid fake outs. Everyone gets faked out, even the top retail traders, hedge funds and market makers.
(3/6) When a stock breaks my support level, I never exit immediately. I always wait to see it hold a full minute under my level. If at any point during the minute the stock enters back in my range, I will hold it longer.
(4/6) Using 313.21 as my support level, we notice a breakthrough during the 2:21 candle. Sticking to my rules, I do not sell on the break. During the next minute we notice MSFT enters my levels again.
(5/6) The 2:22 Candle must have remained below 313.21 for the full minute, I would have begun looking to exit. If I had panic sold on the break, I would have missed out on a good trade. It’s important to drop emotions and look at a stock technically when we see a break.
(6/6) Thank you for reading! Feel free to share with someone who could use this! More Threads on the way!
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