How and When Do You Trade Fakeouts?

Firstly what is a fake out?⠀
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It’s when price breaks out of a structure.

This in turn traps many retail traders and comes back into the structure to continue moving in the unanticipated direction like the chart above.⠀
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Price broke beneath the trend line which indicates price is going down but then it broke back above the ascending trend line indicating price to go up.⠀
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How would you trade a fake out?⠀
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You wait for price to come back into the structure before entering a trade.

For example, the image above shows price came back above the ascending channel but then came back down to test the trendline, this is the optimal entry point.⠀
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@MichelleToro ☀️ #education #tradingfakeout