In simple terms
In trading language, a fakeout is a false break. Price crosses support, resistance, or the edge of a range and appears to begin a breakout, but fails to continue and returns to the previous area.
“Fake” does not mean that the price is fabricated. It means that the signal assigned to the break was not confirmed by the price action that followed.
How the term is used
Fakeout is the general term. When an upside break fails and traps buyers, it is often called a bull trap; when a downside break fails and traps sellers or short traders, a bear trap.
No distance or duration works for every market. For the full operational explanation, see False breakout.
Limit
Failure becomes evident only after price returns across the chosen level. The label therefore needs a rule for the level, timeframe, and confirmation; it does not automatically forecast the next direction.
Sources
- CMT Association, P&F Traps: Rules That Define Weakened Bulls & Bears — discusses traps and false breaks as failures of earlier signals.
- CME Group, Support and Resistance — describes levels and breaks and notes that support and resistance are zones rather than guaranteed exact prices.