Deep false breakout
Also called: deep fakeout, deep false break
A deep false breakout is the kind of false breakout that counts against a level. Price crosses the line, keeps going for a whole day’s range, and only then turns and closes back. On the chart it looks like a big rejection. In this course it is one of the two signs that weaken a level; the other is a sawed zone, where price closes on both sides of the line again and again.
How to measure the depth
Take the distance the wick went past the level and divide it by the instrument’s daily average true range (ATR) on the day of the false breakout. A level has no ATR of its own; the ATR belongs to the instrument on that day.
Example. A resistance is at 100.00 and the daily ATR is 4.00. A candle trades to 104.40 and closes at 99.20. The wick went 4.40 above the level: 4.40 / 4.00 = 1.1 ATR. That is a deep false breakout.
On a real market. Ethereum’s perpetual contract stopped at 2,566.40 on 27 August 2026. On 11 September price went to 2,666.00, 99.60 above, on a daily ATR of 91.03: 1.09 ATR. It closed back at 2,515.47. On 18 September a candle closed through the level at 2,611.15.
Deep vs shallow false breakout
| Depth beyond the level | Name | What it says |
|---|---|---|
| Up to 0.15 ATR | Shallow false breakout | Strengthens the level |
| 0.15 to 1 ATR | Neither | The level held, no confirmation |
| 1 ATR or more | Deep false breakout | Weakens the level |
Why it weakens a level
At a defended level, price should be stopped at the number. A deep false breakout shows it was not: it ran a full day’s range past the line before anyone turned it. Every stop-loss placed close behind the level was taken. The course stop is 10% of the daily ATR beyond the level, and a deep false breakout goes ten times past it.
Deep false breakouts in this course
A deep false breakout is a warning, not the end. A level is ended by a body close through it (sawed-through levels coming soon). After a deep poke, wait for a touch to the cent or a shallow false breakout before treating the level as defended again. See deep false breakouts weaken a level coming soon, shallow false breakouts and the checklist in what makes a level strong.
Questions about deep false breakout
What is a deep false breakout?
It is a candle that trades beyond a level by at least one daily average true range (ATR) and then closes back on the original side. The close says the level held. The depth says the defence was not at the line that day.
Does a false breakout make a level stronger or weaker?
It depends on the depth. A shallow false breakout, up to 0.15 of the daily ATR, makes a level stronger. A deep one, from one ATR, weakens it. Between the two, the level held but the poke does not confirm it.
Is the tip of a deep false breakout a new level?
No. The tails of false breakouts at extremes are not levels. The level stays at the high or low of the candle that formed it.
Does a deep false breakout end a level?
No. It weakens the level. A level ends when a candle body closes through it. A weakened level can be reconfirmed by a touch to the cent or a shallow false breakout on a later test.