When price breaks out of a clear range but fails to hold above the breakout level, trapped breakout buyers become forced sellers. Fade the failed breakout for a move back through the range to the opposite side.
Indicators Used
Donchian ChannelSwing High/Low
Rules
📉 Short Failed Break Up
- Identify clear horizontal range (support + resistance) for 10+ candles
- Price breaks above resistance with apparent momentum
- Within 1-3 candles, price closes back below former resistance
- Enter short on close back inside the range
- Stop: above the failed breakout high
- Target: opposite side of range (prior support)
📈 Long Failed Break Down
- Range established, price breaks below support
- Within 1-3 candles, closes back above former support
- Enter long on reclaim close
- Stop: below the failed breakdown low
- Target: opposite side of range (prior resistance)
1-3 candles
Failure Window
Opposite Side
Target
💡 Pro Tip
Failed breakouts work because they trigger a compounding cascade. Breakout buyers get stopped, short sellers pile in, and the rejection accelerates. The tighter and more obvious the range, the more 'trapped' participants exist on the wrong side.