A breakout is price leaving a range or crossing an important level. Breakouts can start powerful moves, but many fail and snap back: these are fakeouts.

Signs of a real breakout

• A decisive close beyond the level, not just a wick poking through.
• Momentum: a large candle, ideally after a period of compression (a squeeze or tight range).
• Context: breaking in the direction of the higher-timeframe trend.
• Timing: during an active session, not in the quiet hours.

Three ways to enter

1. On the close. Enter when a candle closes beyond the level. Simple, but the stop is often wide.
2. On the retest. Wait for price to come back and test the broken level from the other side. Better price and a tighter stop, but you miss breakouts that never retest.
3. With a stop order. Place a buy stop just above resistance in advance. You will not miss the move, but you will be caught by some fakeouts.

Managing fakeouts

Fakeouts are part of breakout trading. Keep losses on failed breaks small, with stops back inside the range. If a breakout fails sharply, the opposite move often runs far, because everyone who bought the break is now trapped.