True break vs fake-out (liquidity grab)

The trap that catches everyone

The hardest part of breakouts is that most of them fail. Price pokes above resistance, every breakout buyer piles in expecting a rally — and then it snaps right back below the level and collapses. This is a fake-out, and it is rarely an accident. Large players know exactly where the stops and breakout orders are resting just beyond a level. They push price through to grab that liquidity, fill their own opposite position against the trapped crowd, and let the reversal run.

The one rule: close, not touch

The cleanest filter is the body close. A wick poking beyond a level proves nothing — wicks are exactly how stops get hunted. What counts is where the candle *closes*. A real break closes its body clearly beyond the level and the next candles hold there. A fake-out leaves a long wick beyond the level but closes back inside, often as a single rejection candle.

• Most breakouts fail — assume fake-out until proven otherwise.
• Body CLOSE beyond the level confirms; a wick beyond means nothing.
• Fake-outs cluster at obvious highs/lows where stops are stacked (liquidity grabs).
• Never chase the breakout candle — wait for confirmation or the retest.