You place a buy order above the current range and catch the break. The pair moves higher, but doesn’t get too far, retreats quickly back to range and catches your stop loss. It then makes the break once again, but this time with full force, moving significantly higher and reaching your previous Take Profit point. Sounds familiar? For some, this is too familiar. What can you do about it? The answers vary, but there’s clearly something you shouldn’t do. The scenario described above can happen in the other direction as well – when you enter a short on a break only to see an initial false downwards break that catches your short position, but not for long. Here are some things you can ask yourself: Range: Was the pair indeed trading in a distinct range? Perhaps the whole trade idea was based on a range that wasn’t distinct enough. Safe distance: Was your order far enough from the range? Perhaps you caught a small dip on low volume that was later corrected. Channel?: Is the pair moving in an upwards or downwards channel? Perhaps you were looking into a flat range while there was a trend lower or higher. Bigger Picture: Did the break coincide with a long term trend, or did it go in the opposite direction? When this is a counter trend, it is more tricky. After checking all these things, you are certain that you made the right decision with the correct parameters, and still lost the trade. Well, this happens in many cases. The first break is not the real one. In many cases, new ground is tested briefly before the real move. In order to protect yourself, a smaller position size is a great solution, that will reduce the loss potential. The second break already has better chances of succeeding, and a normal position is size can make more sense. As always, be careful! What shouldn’t you do? Do NOT move your stops. It may be a false break with no real break to follow up on it. If this is the case, you’ll just lose more. And if it does accidentally work once, you’ll develop a bad habit that can open the door to huge losses in the future. Do you experience false breaks? Do you have any tips to share? Further reading: 5 Most Predictable Currency Pairs Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Basics & IndustryForex Basics share Read Next Forex Daily Outlook – August 23 2011 Anat Dror 12 years You place a buy order above the current range and catch the break. The pair moves higher, but doesn't get too far, retreats quickly back to range and catches your stop loss. It then makes the break once again, but this time with full force, moving significantly higher and reaching your previous Take Profit point. Sounds familiar? For some, this is too familiar. What can you do about it? The answers vary, but there's clearly something you shouldn't do. The scenario described above can happen in the other direction as well - when you enter a short on a break… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk.4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk.5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.