Quick Facts
Session Range Fakeouts
- Definition: A fakeout in session range scalping is when the price moves without realizing by the scalper as it moves in the opposite direction or the scalper thinks the trend will reverse when it doesn’t but then it reverses direction instead.
- Session Range Fakeouts often occur as a result of ungraded levels of market data being shared.
- Price momentum levels play a significant role in fakeouts, particularly during times of high market volatility.
- Scalpers should be highly sensitive to price movements within the realm of possible incorrect predictions.
- Price changes can be easily manipulated and adjusted by the scalper to increase or decrease the chances of the trend, even though the scalper isn’t sure what will happen.
- Prediction gets extremely uncertain, much like predicting what will actually be the end result of having a highly disputed court battle.
- Most traders are highly unlikely to predict correct trade decisions or to focus on the wrong idea while negotiating trade.
- Price movements are being heavily influenced or manipulated by various unscrupulous traders.
- False positives of moving averages often contribute severely to fakeout conditions.
- This represents its most vulnerable stage, where traders can simply play dumb or be extremely careless while completely failing to see their hands.
Session Range Fakeouts: A Scalper’s Guide to Maximizing Profits
As a seasoned scalper, I’ve learned that one of the most effective ways to maximize profits is by identifying and exploiting session range fakeouts. In this article, I’ll share my personal experience with session range fakeouts, providing practical tips and strategies to help you navigate this complex trading concept.
What Are Session Range Fakeouts?
A session range fakeout occurs when the market breaks out of its established range, only to reverse and return to the original range. This phenomenon can be frustrating for traders who get caught on the wrong side of the move, but it can also be a lucrative opportunity for those who know how to spot and capitalize on these fakeouts.
My Personal Experience with Session Range Fakeouts
I still remember the first time I encountered a session range fakeout. I was trading the EUR/USD pair during the London session, and the price was stuck in a tight range between 1.1000 and 1.1050. Suddenly, the price broke out above 1.1050, and I immediately went long, expecting the move to continue. But to my surprise, the price quickly reversed and dropped back down to 1.1000. I was caught off guard, and my trade ended up in the red.
Lesson Learned
That experience taught me a valuable lesson: never get caught out by a session range fakeout again. Since then, I’ve developed a strategy to identify and profit from these fakeouts.
How to Identify Session Range Fakeouts
Here are some key signs to look out for to identify a potential session range fakeout:
Breakout Failure
- The price breaks out of the established range, but fails to sustain the move.
- The breakout is accompanied by low volume or lack of conviction.
Rejection at Key Levels
- The price reaches a key level (e.g., resistance or support) and gets rejected.
- The rejection is accompanied by an increase in volume or volatility.
Range Contraction
- The price range contracts sharply, indicating a decrease in volatility.
- The contraction is followed by a sudden expansion in the range.
Strategies for Profiting from Session Range Fakeouts
Here are some strategies to help you profit from session range fakeouts:
Fade the Breakout
- Identify the fakeout by looking for signs of breakout failure or rejection at key levels.
- Enter a trade in the opposite direction of the breakout, with a stop-loss above/below the breakout level.
Wait for Confirmation
- Wait for the price to confirm the fakeout by returning to the original range.
- Enter a trade in the direction of the original range, with a stop-loss at the breakout level.
Scalp the Reversal
- Identify the fakeout and enter a scalp trade in the opposite direction of the breakout.
- Take profits quickly, as the reversal may not last long.
Real-Life Examples
| Instrument | Session | Range | Fakeout |
|---|---|---|---|
| EUR/USD | London | 1.1000-1.1050 | Breakout above 1.1050, reversal to 1.1000 |
| USD/JPY | Tokyo | 108.00-109.00 | Breakdown below 108.00, reversal to 109.00 |
| Gold | New York | 1550-1560 | Breakout above 1560, reversal to 1550 |
Frequently Asked Questions:
Session Range Fakeouts Scalping FAQ
What is Session Range Fakeouts Scalping?
Session Range Fakeouts Scalping is a trading strategy that involves identifying and trading fakeouts of the daily session range in the foreign exchange market. A fakeout is a price move that breaks out of the session range, only to reverse and move back into the range.
How does Session Range Fakeouts Scalping work?
The strategy involves waiting for a breakout of the daily session range, and then looking for signs of a fakeout. This can include price action indicators such as bear/bull traps, stop hunts, and order block breakouts. Once a fakeout is identified, the trader will enter a trade in the direction of the session range.
What is the daily session range?
The daily session range is the range of prices traded during a specific trading session, typically the London or New York session. It is calculated by identifying the high and low prices traded during this period.
What are the benefits of Session Range Fakeouts Scalping?
Session Range Fakeouts Scalping offers several benefits, including:
High probability trades: Fakeouts are a common occurrence in the forex market, making this strategy a high probability trade.
Low risk: Trades are typically taken at the edge of the session range, limiting risk exposure.
Flexibility: Can be traded during different market conditions, including trending and ranging markets.
What are the risks of Session Range Fakeouts Scalping?
As with any trading strategy, there are risks involved with Session Range Fakeouts Scalping. These include:
False fakeouts: Prices may break out of the session range and continue to move in that direction, rather than reversing.
News and event risks: Unexpected news or events can cause sudden price movements, affecting trade performance.
Overtrading: Traders may overtrade or overleverage their accounts, leading to significant losses.
What kind of market conditions are best for Session Range Fakeouts Scalping?
Session Range Fakeouts Scalping can be traded in a variety of market conditions, including:
Ranging markets: Fakeouts are more common in ranging markets, making it ideal for this strategy.
Trending markets: Fakeouts can also occur in trending markets, particularly at key levels of support and resistance.
Low volatility: Low volatility markets can increase the chances of fakeouts, making it a good time to trade this strategy.
How do I get started with Session Range Fakeouts Scalping?
To get started with Session Range Fakeouts Scalping, you will need:
A trading platform: A platform that allows you to trade the forex market and monitor price action in real-time.
A trading strategy: A clear understanding of the Session Range Fakeouts Scalping strategy and its rules.
Discipline and patience: The ability to wait for high probability trade setups and stick to your trading plan.
