{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/forexschoolonline.com\/gold-fires-false-break-engulfing-bar-25-april-2014\/#BlogPosting","mainEntityOfPage":"https:\/\/forexschoolonline.com\/gold-fires-false-break-engulfing-bar-25-april-2014\/","headline":"Gold Fires Off False Break Engulfing Bar | 25 April 2014","name":"Gold Fires Off False Break Engulfing Bar | 25 April 2014","description":"Gold (XAUUSD) has fired off a false break bullish engulfing bar on the daily price action chart. This engulfing bar is making a clear false break with the low of the engulfing bar moving down and past the recent swing support level, before snapping back higher to form the bullish engulfing bar and completing the […]","datePublished":"2014-04-25","dateModified":"2019-08-06","author":{"@type":"Person","@id":"https:\/\/forexschoolonline.com\/author\/jonfox\/#Person","name":"Johnathon Fox","url":"https:\/\/forexschoolonline.com\/author\/jonfox\/","identifier":1,"description":"Johnathon is a Forex and Futures trader with over ten years trading experience who also acts as a mentor and coach to thousands and has written for some of the biggest finance and trading sites in the world.","image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/d0b589a007c132efe23124c05a02b68524844c0089401129bd50bc12ee59d3a9?s=96&d=monsterid&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/d0b589a007c132efe23124c05a02b68524844c0089401129bd50bc12ee59d3a9?s=96&d=monsterid&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Forex School Online","logo":{"@type":"ImageObject","@id":"https:\/\/www.forexschoolonline.com\/\/wp-content\/uploads\/2018\/09\/FSO-Transparent-logo-gr.png","url":"https:\/\/www.forexschoolonline.com\/\/wp-content\/uploads\/2018\/09\/FSO-Transparent-logo-gr.png","width":240,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/www.forexschoolonline.com\/\/wp-content\/uploads\/2014\/04\/gold.png","url":"https:\/\/www.forexschoolonline.com\/\/wp-content\/uploads\/2014\/04\/gold.png","height":"605","width":"916"},"url":"https:\/\/forexschoolonline.com\/gold-fires-false-break-engulfing-bar-25-april-2014\/","about":["Featured Articles"],"wordCount":478,"articleBody":"Gold (XAUUSD) has fired off a false break bullish engulfing bar on the daily price action chart. This engulfing bar is making a clear false break with the low of the engulfing bar moving down and past the recent swing support level, before snapping back higher to form the bullish engulfing bar and completing the false break. The reason this pattern is called a “False Break” is because price moves through a recent level and gets a lot of the market going one way and thinking that a support or resistance level is going to break and then price quickly snaps back the other way and in doing so stops out a lot of the market who entered trades thinking the market was going to move with the breakout. Because price does not break the level, the pattern is known as a “False Break”.The chart below of the daily Gold market shows clearly how this false break works. Price moved below the recent support level and this would have got a lot of the market entering into short trades thinking that price was looking to break this recent support and continue moving lower. Price then snapped back higher and would have stopped a lot of these traders out who were looking for price to move lower. Often these false breaks can be explosive once they begin to reverse because once the stops start to get activated it can be like adding fuel to a fire and the higher price goes the more stops it begins to activate and if traders look at the 4hr chart of Gold they will see how explosive this snap back higher was once the reversal started. The inner workings of the false break can often be quite similar to that of the pin bar in that both are trying to fake out the market and get the market going the wrong way with price snapping back in the opposite direction. I explain in more depth how this works in this article here: Read Order Flow With Price ActionFrom here price would need to confirm the bullish engulfing bar by breaking through the high to have any chance of continuing to move higher. If price can break the engulfing bar high and then continue moving higher the next resistance levels come in around the\u00a01306.70 and then\u00a01327.70. Price Action traders should keep a look out for false break setups on their charts when they happen at key levels because when they are played from the best areas on the charts they can be very high probability plays. \u00a0You can watch a video of a recent trade I made of a false break setup I played on the daily chart here: Daily False Break Pin Bar Video Gold Daily Chart\u00a0Related Forex Trading Articles & Videos–\u00a0Daily False Break Pin Bar Setup *Video*"}