I noticed that many beginners confuse a regular breakout with a false one. I want to share how I learned to catch false breakouts at key levels and profit from them.

In short: a false breakout at a level is when the price sharply breaks through a support or resistance level, triggers traders’ stops—so-called “stop collection”—and then pulls back. It sounds simple, but in practice you need to be able to distinguish such a false breakout from a real one.

First of all, draw levels correctly. I use a trend-reversal strategy—it helps identify truly important levels. Then I wait until the price comes back to that level again.

What I pay attention to when trading a false breakout at a level:

First—approach speed. If the price approaches with large candles, that’s different from a typical breakout, where the movement is gradual and made up of small candles. Second—time. When the price returns to the level after a long break (a distant retest), this is a good signal. Third—ATR. If the candle has moved more than the average daily range (ATR), then there may not be enough energy to continue the move. And fourth—the close of the previous candle should be far from the level.

Entry practice: I wait until the false breakout at a level has already happened, and then I enter above the level. If the breakout is small (by 2% on 2), I set the stop-loss behind the tail of the candle. For a stronger breakout—behind the level itself. These are the four factors I check before every such trade.

This approach helps me catch pullbacks and profit from them systematically. Try applying these rules—the results should follow.