Fakeout

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Fakeout

In technical analysis, an informal term for a situation in which an analyst takes or recommends taking a position because technical indicators show that some market movement will take place, but it never does. Technical analysts base their recommendations and investments on the idea that past market movements predict future movements; a fakeout occurs when they apply this methodology and the opposite of what was expected occurs. To reduce the possibility of fakeouts, most technical analysts look at multiple indicators before making any recommendations. See also: Noise.