What is a break and retest strategy?

Instead of jumping in immediately, a trader using the Break and Retest strategy waits for the price to come back down and retest the old resistance level, which has now become a new support level. If the price holds at this level, it’s often seen as confirmation that the breakout was legitimate, offering a high probability entry point.

How to trade break and retest strategy?

First and foremost, always set a stop-loss. When trading the Break and Retest strategy, place your stop-loss just below the retested support level (in an uptrend) or above the resistance level (in a downtrend). This ensures that if the retest fails, you’re not caught holding a losing trade.

How to trade a break & retest pattern?

The bullish Break & Retest:The bearish Break & Retest:II. How to trade the break and retest:Identifying and anticipating: The crucial first step in trading the Break & Retest pattern is to identify significant support and resistance areas on the price chart. Once these levels are recognised, traders should anticipate the pattern's development.