Head-Fake Trade

Categories: Trading, Banking

So close! The stock popped suddenly from $38 to $40. The chart showed a base in the low 30s, and everything was pointing to a breakout somewhere in the high 40s, and you thought you'd jump. You bought at $40.

But alas, the stock didn't perform according to what the chart said it should.

It retreated back to its base in the low $30s. That's a head fake trade. The technical analyst chart loving trader who was following this piece of paper fell in love with the visual dynamics of a break out, and instead, the only break out she got was that round red thing in the middle of her forehead.

She was head faked. Or, well, forehead faked.

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