STRATEGY · FADE
Failed breakout fade (FAILED-BREAKOUT-FADE)
DISABLED
How the setup is identified
Fades a false breakout — price breaking a level, failing to follow through, and returning inside the range.
Status and evidence
| Field | Value |
|---|---|
| Engine ID | FAILED-BREAKOUT-FADE |
| Family | Fade |
| Status | Disabled — did not survive testing |
−$40.42 over 13 live trades. Looked like the best choppy-market earner in replay (+$220) while losing money live in both directions — the clearest case of a backtest lying we found.
What we learned
This is the clearest case in our entire dataset of a backtest lying, and it is worth stating in full: it looked like the best choppy-market earner in replay at +$220, and lost money live in both directions.
The explanation is hindsight. A replay engine knows how the bar closed, so identifying a failed breakout is trivial; in real time, a breakout that has not yet failed is indistinguishable from one that will succeed. Any strategy whose pattern is defined by what happened next is at risk of this, and it is why we now treat large replay-only outperformance as a warning sign rather than a selling point.
Other fade strategies
Educational information only, not financial advice. Trading leveraged products carries substantial risk of loss. Last updated 2026-08-11.