CRUDE OIL, Weekly Pivots and False Breakouts

If you're a fan of pivots, and want to learn how to trade false breakouts (specialist trap, 2B, or failed pivots as they're also known, you could make a lucrative living off this style of trading. It's also known as a "wash and rinse trade". You can look these up on the net in a lot of places. These formations appear on many markets, futures, forex and stocks and on many time frames. One hour or more candles are more reliable.

Notice on this chart that prices reacted nicely to weekly pivots where the breaks occur. You should also see large volume spikes around these areas where breakout traders get trapped and have to get out out of their position. Retail traders get killed at these points. You'll also notice a rise in OBV as accumulation takes place by professionals before the last pivot move up last night.

It's not 100% fool proof, but its worth considering as the price reaction at these points is explosive.