The document discusses techniques for protecting against false signals, or "head fakes", when trading based on chart patterns. It recommends: 1) Not overcommitting capital to any one position, and leaving a cushion so you don't feel rushed to act on every small move in the market. 2) Letting time play in your favor by observing how prices trade after hitting support/resistance levels for a few minutes, rather than acting too quickly. 3) Placing stop losses above or below key support and resistance levels that are identifiable on price charts, such as swing points or daily pivot points.

1. False Setups &
Protecting
Against the Head
Fakes
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2. False Setups
 Trading comes down to who can realize profits from
their edge in the market.
 While it is easy to scroll through charts and see all
the winners, the market is one big cat and mouse
game.
 Between the quants and smart money, the false
setups are everywhere.
 As a price action trader, you cannot rely on other off-
chart indicators to provide you clues that a formation
is false.

3. False Setups
 Just to be clear, the chart formation is always
your first signal, but if the charts are unclear,
time is always the deciding factor.
 I did a study of all my winning trades and over
85% of them paid in full within 5 minutes.

4. How to Protect
Against the
Head Fakes
 There are many ways
you can protect
yourself against head
fakes.
 For starters, do not
go hog wild with your
capital in one
position.

5. Protecting Against the
Head Fakes
 Make sure you leave yourself enough
cushion, so you do not get antsy with every
bar that prints.
 Also, let time play to your favor. I know there
is an urge in this business to act quickly.
 However, there is some merit in seeing how
a stock will trade after hitting a key support
or resistance level for a few minutes.

6. Where to Place Your
Stops
 One thing to consider is placing your stop above or
below key levels.
 Since you are using price as your means to measure the
market, these levels are easy to identify.
 Now one easy way to do this as mentioned previously
in this article is to use swing points.
 A more advanced method is to use daily pivot points.

7. Thank you
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