The breakout that pokes through, fails, and snaps back through the level it just cleared.
“The size and speed of the reversal candle is the tell. A weak, grinding snap-back is a coin flip. A fast, violent one is the setup.”Jason Parker · Founder
A breakout pokes through a level, gets a candle or two of hope, then snaps back through that same level with more force than the original break had. The reversal candle is usually bigger and faster than the breakout it's erasing. You're trading the breakout traders who just got trapped, and their exits.
| Entry | On the close back inside the level, or the retest of that level from the other side |
| Exit | Back to where the failed move started, or the opposite side of the range |
| Stop | Beyond the failed breakout's own extreme, since a genuine fakeout shouldn't revisit it |
An illustrative example built to show the setup’s shape. Not historical price data, and not tied to any specific ticker.
Not every poke through a level is a fakeout. Some are a slow breakout that needed one extra candle to confirm, and fading those costs you exactly when the move finally gets going. The size and speed of the reversal candle is the tell. A weak, grinding snap-back is a coin flip. A fast, violent one is the setup.
None of this works without the framework underneath it. Read risk management next, or run your own numbers in the position-size calculator.
Common questions about trading this setup, answered straight.
Entry comes on the close back inside the level price just broke, or on the retest of that level from the other side, not on the poke through it.
The stop sits beyond the failed breakout's own extreme, since a genuine fakeout should not revisit that price. The target is back to where the failed move started, or the opposite side of the range.
Not every poke through a level is a fakeout. Some are a slow breakout that needed one extra candle to confirm, and fading those costs you exactly when the move finally gets going. The size and speed of the reversal candle is the tell: a weak, grinding snap-back is a coin flip, a fast, violent one is the setup.
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