I've noticed that many traders still haven't learned how to properly work with false breakouts. This is truly one of the most profitable patterns if you understand its essence. When the price approaches a key level, slightly breaks through it, and then sharply reverses—that's a false breakout of the level. In slang, we call this "stop hunting" because the price triggers the traders' stop orders that they placed beyond the level.

The first thing to grasp is the correct placement of support and resistance levels. I always follow a trend reversal strategy; it gives me clear points. Then I wait for the price to approach this level again and perform a false breakout.

There are several factors that help me identify a quality false breakout. The first is a rapid approach to the level with large candles. This differs significantly from a normal breakout, where the price approaches gradually with small candles. The second factor is a distant retest, when the price returns to the level after a significant amount of time.

The third factor is related to ATR. The indicator shows the average distance the asset moves over a period. If a candle moves much more than its norm, it means there isn't enough energy for further movement. Another important point is that the previous candle's close should be far from the level. These are the four key factors I use for trading false breakouts.

The entry tactic is simple—enter only after the false breakout has already occurred and definitely above the level. If the false breakout is small, around 2%, I place the stop-loss behind the tail of the candle. If the breakout is stronger, then I can set the stop-loss just beyond the level. The main thing is not to rush into the trade before the pattern is fully formed. This significantly increases the probability of a successful trade.