Unit 1 · Level 2 · Support & Resistance
Ranges, breakouts & fakeouts
Most of the time, price bounces between a support floor and a resistance ceiling. That's a RANGE. Markets spend far more time ranging than trending. The eventual escape from a range (the breakout) is where big moves are born… and where traps are set.
Free to play. No ads, no token, no account needed to start.
What this lesson covers
The fakeout
Not every breakout is real. A FAKEOUT pokes above resistance, triggers everyone's excited buy orders… then collapses back into the range, trapping them. Volume is your lie detector: real breakouts bring crowds.
What you get asked
Price has bounced between $200 and $220 for six weeks. This structure is called…
Floor at $200, ceiling at $220. Range traders buy low and sell high inside it, until it breaks.
Price breaks above the range ceiling on volume LOWER than average. Your Unit 3 training says…
No crowd, no conviction, no trust. The patient move is waiting for the retest to hold, or for volume to confirm.
Why do fakeouts hurt beginners so much more than experienced traders?
Pros get faked out too, but their stop takes a small planned loss while beginners ride the full round trip down. Same event, different damage. That's ALL risk management, which is exactly where we go next. 🐜
The rest of this unit
Floors, ceilings, flips, moving averages: where the battles happen.