Fakeouts occur when the price breaks a key level but reverses shortly after, trapping traders. To avoid falling for fakeouts, wait for confirmation, such as a strong candle close beyond the level or increased volume. For example, if USD/CAD breaks below support at 1.3500 but quickly reverses, it’s likely a fakeout. Use stop-loss orders and consider trading smaller positions during uncertain breakouts. Spotting fakeouts early can save you from unnecessary losses.