BREAKOUT or FAKEOUT ? How to find out and initiate a trade ?In this post we will see how to initiate a trade in a dilemmatic sitiuation,i.e.,a small green doji type candle coming out of the falling wedge pattern,which leads to the confusion whether to take a trade or not.We would be in dilemma whether it is a breakout or a fakeout? Whether to initiate a trade now or to wait ? In such a situation taking help of a indicator would help you.I have took the help of 20 EMA (Exponential Moving Average) here.
As you can see with the help of 20 EMA we have found that there is price rejection at the 20 EMA for the past few trading sessions.
So, as marked in the chart initiating a trade only after breaking and closing above the 20 EMA as well as above the red resistive trend line would be viable for a successful trade and to attain and book profits at the mentioned targets in the chart as marked.
