Breakouts, Fakeouts, and How VIV Spots the Difference

Not Every Breakout Is Real 

Few things are more frustrating for a trader than watching price break above a key level… only to collapse minutes later. You entered thinking you’d caught a big move, but instead you bought the top. This is the world of fakeouts — false breakouts designed to trap retail traders. And here’s the truth: they’re not random. They’re engineered. Understanding the difference between a real breakout and a trap can protect you from losses — and even help you trade with the smart money instead of against it.

1. What Makes a Breakout Real?

A real breakout occurs when price pushes through a key level with genuine participation. That means:

  • Strong momentum candles (decisive moves, not timid pokes).
  • Higher-than-average volume — proof that big players are involved.
  • Little to no immediate rejection — price doesn’t instantly snap back below the level.

In short, when institutions are committed, price doesn’t hesitate.

2. What’s Behind Fakeouts?

A fakeout (false breakout) happens when price briefly pushes through a level without real conviction. Here’s how they often play out:

  • Smart money pushes price above a resistance line to trigger retail buy orders.
  • Once trapped traders jump in, institutions sell into their enthusiasm.
  • Price quickly drops back below the level — leaving retail traders holding losing positions.
This “stop hunt” isn’t illegal; it’s just how deep-pocketed players build positions at better prices.

3. Clues That a Breakout Is Fake

To avoid being trapped, watch for these warning signs:

  1. Weak candles at the breakout point.
    • If price barely creeps over the level, it may lack conviction.
  2. Low or average volume on the breakout.
    • If institutions aren’t active, the move may not last.
  3. Immediate rejection wick.
    • A quick push above followed by a fast sell-off is a classic trap.
  4. Breakout against higher-timeframe structure.
    • If the bigger trend is bearish, a bullish breakout may just be a squeeze before new lows.

4. How to Confirm Breakouts Manually

If you’re trading without tools, here’s a quick checklist:

  • Zoom out to check the bigger trend direction.
  • Mark major supply/demand zones — is price breaking into strong resistance?
  • Watch for above-average volume — if volume is missing, be cautious.
  • Wait for a retest — genuine breakouts often pull back to confirm the level.

How VIV Makes This Faster and Clearer

Doing all of the above manually is time-consuming. You need to check every breakout candle, compare volume levels, and constantly monitor multiple timeframes. One missed detail, and you’re caught in a fakeout. This is where VIV (Very Important Volume) simplifies the process:

  • Flags candles with exceptional volume activity (+)— instantly telling you if smart money is participating.
  • Highlights zones where breakouts are likely to succeed or fail (VIV || H & VIV || L) — based on real institutional footprints.
  • Keeps your chart clean — no need to manually draw dozens of lines and annotations.
Instead of asking “Is this breakout real?” you can see at a glance whether the volume confirms the move.

Turning Fakeouts Into Opportunities

Here’s the advanced part: fakeouts can be traded — if you know what to look for.

  • If price briefly breaks out on weak volume and quickly snaps back, that’s a short setup (for bearish traps) or long setup (for bullish traps).
  • VIV makes spotting these “trap candles” straightforward (+) — you can identify where smart money rejected the move.
What used to be a painful loss can become a profitable trade once you understand how to read the signs.

Conclusion

Stop Guessing, Start Reading the Story Breakouts and fakeouts aren’t random — they’re just a reflection of who’s in control. When you learn to read price and volume correctly, you stop chasing every move and start trading alongside the professionals. Whether you do this manually or let VIV handle the heavy lifting, the principle is the same:
Strong breakouts leave footprints. Weak ones leave traps. If you’ve ever felt like the market was “out to get you,” it’s probably because you were trading breakouts without confirmation. The good news? Once you see through the traps, the market starts to make a lot more sense.

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By Sunil Sethi
Trading markets since 2016 | Swing & Positional trader | Price Action | Reversals
Building clarity in the chaos of charts — blending tech leadership with market mastery.

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