Glossary / Price action

Failed breakout

An educational concept. Not a signal, not a strategy, and not a trade Josh has taken.

A flowing ice-blue glass ribbon rising and dipping through empty space, an unlabeled picture of price in motion.
Illustration of the idea, not a market chart and not a result.

A breakout that closes beyond the level but then falls back inside within a short time, trapping traders who bought (or sold) the break.

How traders use it: Trapped traders exiting can fuel a move the other way, which is why some traders treat a confirmed failure as an idea in itself.

Common mistake: Holding a breakout trade after it has clearly failed because "it should have worked".

Related: Fakeout · Deviation · Swing failure pattern (SFP)

See this term in the full glossary · All terms

Concepts only. Education only, not financial advice. No pattern on this site has a published win rate.