A fake-out is a price spike that breaks a level then immediately reverses back through it on the same or next bar. Often interpreted as stop-hunt / liquidity grab.
Shape
{ "type": "fake_out" }Usage
- Reversal entry in the direction opposite the failed break.
- Pair with structure: fakeouts at swing highs/lows are higher-quality than mid-range fakeouts.
Pitfalls
- What looks like a fakeout on the close can be a real breakout on the next bar. Wait for at least one confirmation bar after the reversal before sizing in.
- Fakeouts are common on low timeframes - combine with a higher- timeframe trend filter to avoid fading real moves.