A situation in which the price movement of an asset does not go as expected.
A fakeout is a term used to describe a situation in which a trader confidently expects the price of an asset to rise or fall, and it does not. Instead, the price of the asset might even go in the opposite direction than expected by the trader. A fakeout is consequently an unexpected situation and has harsh implications on the subsequent decisions and confidence of the trader or investor.
Protecting oneself against fakeouts is the same as reducing the odds of unnecessary risks and losses. Thus, fakeouts can be checked by using multiple technical indicators to observe and predict price movements.