I've noticed that many beginners in crypto trading lose money on the same mistake. They see the price break through a level, enter a position, and then the price reverses and stops them out. This isn't just a failure — it's a false breakout, and you can make good money on it if you know what to look for.

A false breakout occurs when the price approaches a support or resistance level, slightly pushes through it, and then immediately pulls back. People call this "stop hunting" — the price intentionally hits the level to trigger other traders' stop orders, which are right behind that level. Then the price reverses in the opposite direction, and those who caught this move profit.

But how do you distinguish a real breakout from a false one? Here's what I pay attention to. First is the speed of approaching the level. If the price moves with large candles and quickly reaches the level, that's a different story than when it slowly crawls there with small candles. A rapid approach is the first sign that it might be a false breakout.

Second is the timing. When the price approaches the level after a long period, it's called a distant retest. Such moments often end with a bounce because the market has forgotten about that level and reacts differently.

The third factor is ATR. This is the average distance the pair moves in a day. If a candle moves significantly more than usual, it might lack the energy to continue the movement. The price has exhausted its potential and reverses.

And the fourth is where the previous candle closed. If it closed far from the level, it increases the likelihood of a false breakout.

When I see all four factors together, I wait for the false breakout to occur, and only then do I enter a position. You should enter above the level when the reversal has already started. If the breakout is small, about two percent, I place the stop-loss behind the tail of the candle. If the breakout is more aggressive, the stop can be set just beyond the level itself. This scheme has been working for me for a long time, and a false breakout is not a trap but an opportunity.