How to Filter False Breakouts in Momentum Trading: Quantitative Rules [2026]
Date Published
1. Why Breakouts Fail: The Liquidity Sweep Mechanism
Understanding Market Maker Order Flow
Breakouts fail because major market makers need liquidity to fill large institutional orders. Obvious support and resistance levels act as liquidity magnets where thousands of retail stop orders cluster.
Algorithms intentionally push price past key levels to trigger buy-stops, absorbing the liquidity before driving price in the opposite direction.
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