(See chart) How do you protect yourself from these fake reversals?

[biyasc]

Yes, but it would have exited the trade, although it is a fake reversal. I was looking for a way, if we can identify such fake reversals (especially one which occurs with volume like in above case), and accordingly stay in trade, and trail the stoploss higher so that it does not get hit.

If you see in above pic, after the bullish candle was gone, the trend continued further down.

modify stop just above the high only after the closing of that marked bullish bar of yours. just check it out your modified stop is not hit on next bar & price went down for next 2/3 bars.

 

[newtrader101]

If a few more points be added:

• that bullish candle vol was lower than previous candle col
• it had no rejection tail
• in any case, you'd need to confirm with the next candle. Wasn't confirmed.