False breakout

Updated 2026-09-20

Definition

A move beyond a level that doesn't continue: price returns and often reverses.

Why it matters

It traps those who entered on the break. In SMC language it is similar to a liquidity sweep. Risk is reduced by waiting for the close and the retest.

Practical example

Price exceeds 1.1050 with an 8-pip wick and then closes at 1.1042: a false breakout.

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Educational content, not financial advice. Trading involves risk.