COCHINSHIP: False Breakdown SetupCochin Shipyard LimitedNSE:COCHINSHIPsurajprasanna69This is today's example of how powerful False breakdown setups could be.. how quickly we get the reversal moves & how even simple setups like this can give us decent profits... Before knowing how to trade a given setup, first & foremost we must understand how it works & why it works when it does work.. because once we understand the internal mechanics, we can trade the given setup with utmost confidence which is what ultimately matters.. Now let's understand what False breakout/breakdown setups.. these are basically setups where breakout/breakdown traders get trapped.. that's it.. nothing complicated.. the market actually gives the breakout setup which forces the breakout traders to jump in & when there is no follow-through they start freaking out & start to exit their positions which causes the reversal moves.. the best part is if you understand how false breakout works where buyers get trapped, you can trade the other setup too which is false breakdown because that is just sellers getting trapped In this case as we can see clearly market was in a 2 day balance where both buyers & sellers were having their positions. on the 3rd day we broke down from the 2 day balance & built a mini balance area where breakdown sellers were heavily positioned because they hoped for a move down the following day.. this is when we need to have this stock in watchlist as we can get either a breakout setup or false breakout setup next day & both of them can give us great trading opportunities today we got to see a crystal clear false breakdown setup as the first green bar in first 30min trapped all of the breakdown sellers who started to cover causing the next bar up move.. see how strong the 2nd bar up move is.. this is the power of understanding market psychology as it can help us understand which side is in trouble so that we can utilise the given opportunity Disclaimer: This article is shared for educational purposes only and reflects my personal understanding of the concepts discussed. It should not be considered financial or investment advice. Please do your own research before making any trading or investment decisions.