1. Price must come in (1) Rally
2. Then Price makes the first (2) High
3. Then it will make a (3) Low
4. Price will Fake out and form (4) New High
5. After the high break on the left, it will produce one (5) more
6. Price will break (5) base and engulf (3) Low and produce (6) New
7. Entry at (7) Sniper Entry when the price returns to
Conversely, of course also occurs than we speak about a drop / low / high / new low / base / high / sniper entry buy!
Below an example:
Draw a fakeout level on a chart of your choice.