Identifying false signals depends on the trading time horizon. In short-term trading, price fluctuations are influenced by market noise, liquidity manipulation, and algorithmic trading, especially in CFDs. To minimize false signals, traders use strong risk management, multiple indicators, and volume analysis. Long-term investing, however, relies on fundamental analysis, macroeconomic trends, and market cycles. Detecting false signals in this context requires evaluating economic data, corporate financials, and historical trends. A deep understanding of both approaches is essential for making informed market decisions.

Confirm with Volume: Ensure strong price movements are backed by high trading volume. A breakout on low volume is often a false signal, as low volume can indicate a lack of conviction in the move. Use Multiple Indicators: Rely on a mix of technical indicators like RSI, MACD, and moving averages. A single indicator can be misleading, but when several indicators align, it strengthens the signal's credibility. Check Market Context: Broader economic factors, such as financial news, geopolitical developments, and overall market sentiment, can influence whether a signal is trustworthy.

"Unpredictability" is an inherent feature of markets and any business. So false signals cannot be eliminated. As long as our probability of winning is more, investing is not risky. Also more diversification methods are now available. SGBs, REITs and INVITs and Cryptocoins were not there in olden times. We have to keep up with times and make money our tool and not hoard it like a commodity

I think the most important things to do to identify begining or reversal of a trend are rsi index which is a kind of fear and greed index and the vix index. I would look for a short term reversal of a bull market when rsi is above 70 and baer market below 30. For long term trends volume and 200 day moving averages are important. Of course one should never ignore the fundemantals and yield curve structure

To spot false signals in unpredictable markets, focus on multiple indicators rather than a single one. Use fundamental analysis to check if price movements align with economic data and company performance. Confirm trends with volume—low volume may indicate a weak signal. Avoid emotional trading and be cautious of sudden spikes driven by speculation or news hype. Look for divergences in technical indicators like RSI or MACD, which can reveal misleading trends. Finally, backtest strategies and analyze past patterns to differentiate between real and false breakouts before making decisions.