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How to deal with V-Shape fake outs

V-Shape fake out is another way of thinking of a Head and Shoulders (H&S), but I classify them as being more aggressive. Coupling it with a fake break of a SR level or top/bottom of range, it can be a very high probability trade. If you have sold short on the break and it gives you a full (A point) stop then you can immediately think of a cover trade.


Check out this example on the GBPUSD... An aggressive move to break the bottom of the range and an immediate upside move, without hesitation, to write it back off. This means there are simply no sellers and the value of GU is oversold.


Here is another - the USDJPY where it tried to break out of the lower end of the Rectangle and again immediatly wrote it back off.


See if you can find other examples?

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