QQQ Fakeouts (false breakouts/breakdowns) are very similar to takeouts, but the focus is more on the failed directional move; rather than, the liquidity grab itself• A fakeout happens when price breaks above resistance or below support (appearing to confirm a breakout), but fails quickly and reverses
• Traders enter expecting continuation (breakout buyers), but price snaps back into the range
• Often leads to a sharp move in the opposite direction because trapped traders exit
1. Liquidity Traps
• Stops & breakout entries provide liquidity
• Big players push into that liquidity, then reverse once orders are filled
2. Weak Momentum/No Follow-Through
• Sometimes there just aren’t enough buyers above resistance (or sellers below support) to sustain the move
• Without follow-through volume, price collapses back
3. Market Maker Games
• Algorithms & market makers deliberately push price through obvious levels to bait breakout traders, then reverse
• This creates volatility while filling their bigger orders
4. Sentiment Extremes
• Fakeouts are common when traders are too biased one way
• Market moves just enough to convince them they’re right - then reverses
Resistance is at $603 so if price pushes to $604, breakout traders buy, shorts cover & breakout seems real, but price fails back under $600, trapping breakout buyers
• This is a bullish fakeout which often leads to a fast drop toward $588
Support is at $588 so if price dips to $586, looks like a breakdown, buy price snaps back above $590, bearish fakeout, which often fuels a rally back toward highs
1. Low Volume Breaks
• If breakout/breakdown happens on weak volume there is higher chance it’s fake
2. Quick Rejections (Wicks)
• Long tails on candles at key levels show rejection
3. No Retest/Continuation
• Real breakouts usually retest the level and continue; fakeouts fail immediately
4. Overbought/Oversold Indicators
• If RSI/Stoch are stretched at the breakout point, odds of a fakeout increase
Fakeouts happen because markets need liquidity & not every breakout has real momentum behind it; in other words, they’re traps that shake out traders at obvious levels before reversing
• Enter opposite to the failed move
• Avoid placing stops at obvious breakout levels
• Wait for confirmation (retest + hold) before assuming breakout is real
