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Price Action Basics · Price Action Mastery · Lecture 6 · 22:49 video · Urdu / Hindi

How to identify and avoid false breakouts

A false breakout traps traders who buy the break of resistance or sell the break of support, and then price snaps back. This lecture shows how to recognise one, how to avoid it, and how to trade it instead.

Dr. Qazi Abdul Basit
Video lesson by Dr. Qazi Abdul Basit, Ph.D · Forex & Gold trader since 2013
Notes by the Qazi Forex Tips team · Updated 23 October 2026
Watch in Urdu / Hindi · 22:49·Open on YouTube

In this lecture

  • How to identify false breakouts
  • How to avoid being trapped
  • Which swing points not to use when drawing trendlines
  • How to trade a false breakout
Dr. Qazi Abdul Basit
Dr. Qazi's takeIn his own words, from his lectures and teaching

This lecture covers how to identify a false breakout, how to avoid it, which swing points should not be used when drawing trendlines, and how to trade false breakouts.

From the lecture

A written plan you follow, and the patience to skip a trade when the setup is not there.

How Dr. Qazi teaches

Lesson notes

What a false breakout looks like

Price moves beyond a support, resistance or trendline, then quickly closes back inside the range. The breakout candle often leaves a long wick outside the level and a close back inside it.

Warning signs

  • The breakout goes against the higher-timeframe trend.
  • The breakout candle is small or closes near the level, with no momentum.
  • The level was drawn on weak or random points, so it was never important.
  • It happens just before or during high-impact news, or in a quiet session.

How to avoid the trap

  1. Wait for a candle close beyond the level on your entry timeframe, not just a wick.
  2. Prefer breakouts in the direction of the higher-timeframe trend.
  3. Wait for a retest of the broken level when you are unsure.
  4. Check the news calendar before trading a breakout.

Trading the false breakout

When price breaks a level and closes back inside, the trapped traders must exit. A common approach is to enter in the direction of the return, with the stop loss beyond the wick of the failed breakout and the target at the other side of the range.

Khulasa (Roman Urdu / Hindi)

  • False breakout: price level se bahar jati hai aur foran wapas andar band hoti hai.
  • Sirf wick par trade na karein, candle close ka intezar karein.
  • Higher timeframe trend ke khilaf breakout zyada fail hote hain.
  • Fail breakout par SL wick ke peeche, target range ki doosri taraf.

Questions

How do I confirm a real breakout?

Look for a strong candle that closes beyond the level, ideally in the direction of the higher-timeframe trend, and if possible a retest that holds.

Can I trade a false breakout?

Yes. After price closes back inside the range, enter towards the other side of the range with the stop loss beyond the wick of the failed breakout.

What is a fakeout in forex?

Another name for a false breakout: price breaks a level and quickly returns inside.

Why do false breakouts happen?

Stops above highs and below lows are triggered, then larger traders take the other side and push price back.

Which timeframe has fewer false breakouts?

Higher timeframes such as H4 and Daily; lower timeframes have more noise.

Is a false breakout a liquidity grab?

Often yes: price takes out stops beyond a level before moving the other way.

Related lessons

Price Action BasicsSupport and Resistance: how to draw it, and why it failsPrice Action BasicsHow to draw trendlines correctly: swings and rulesChart PatternsTriangle patterns: symmetrical, ascending and descending

Education only, not financial advice. Trading forex, Gold and CFDs carries a high risk of loss. Examples are for learning; test any method on a demo or in a simulator before using real money.