Shakeouts and breakouts

摘要

Catching breakouts creates lucrative trades, but false moves can cause a string of losses. Analyzing price action is key to avoiding these head-fakes. Breakout attempts often end up being nothing more than lies, feints by larger forces, luring small speculators into traps designed to let more nimble stock traders add positions at favorable prices. These larger traders are capitalized and equipped to rush buy or sell orders into a security, shaking out smaller traders, then turning around and taking the opposite side of that trade, profiting on both sides of the price movement.