There’s a belief among some traders that August breakouts are usually fakeouts—that price moves in August often reverse and trap traders. This myth likely stems from August’s reputation as a low-volume, high-noise month. While false breakouts can be more common in August, the idea that all August moves are false is an oversimplification.

Let’s explore what really happens in August—and how to trade it with clarity instead of caution.

Why August Has a Reputation for False Moves

August is often marked by:

• Low institutional participation due to summer holidays
• Lighter trading volumes, especially in equities and forex
• Random volatility caused by thin liquidity
• Fewer economic catalysts until late in the month

These conditions can create less follow-through on breakouts, leading to more failed patterns.

But Not All August Moves Are False

Plenty of genuine breakouts occur in August, especially when:

• There’s a strong macro or technical setup
• Pre-positioning for Q4 begins
• Central bank comments or inflation data provide direction
• Volume returns mid-month, especially around Jackson Hole or Fed commentary

If your strategy filters for structure, volume, and confirmation, August can still offer high-probability trades.

How to Handle Breakouts in August

To reduce the risk of getting caught in a fakeout:

• Wait for confirmation: Let price hold above breakout levels before entering
• Use tighter risk management: Keep stops tighter or trail more aggressively
• Avoid trading low-volume breakouts in pre-market or lunch hours
• Be selective: Focus on breakouts that align with bigger trends and clean consolidation

August requires more discipline, not total avoidance.

False Breakouts Can Happen in Any Month

While August may increase the odds of fakeouts due to liquidity conditions, false breakouts aren’t exclusive to any one month. They can occur:

• During earnings season
• Around major news releases
• In late-stage trends, regardless of season

Blaming the month risks ignoring what matters more: setup quality, confirmation, and volatility context.

Conclusion: August Deserves Caution—Not Assumptions

August doesn’t guarantee false breakouts—it simply demands a more careful approach. Trade with confirmation, stay patient, and remember: your edge should come from process, not the calendar.

To master breakout strategies that work in any market condition—including tricky seasonal periods—explore our Trading Courses designed to help traders build clarity, structure, and long-term consistency.