Retest Confirms Breakout Strength
You see a clear breakout: price moves beyond a well‑tested resistance (or support) with strong volume. The breakout alone tells you the market is attempting a new direction, but it does not guarantee sustainability.
Condition for action: after the breakout, price returns to the broken level and holds there for at least one candle without closing below (for a bullish breakout) or above (for a bearish breakout). The retest must respect the same volume profile that supported the original move.
Invalidation: if on the retest the price pierces the broken level and closes beyond it, or if the retest candle shows a clear rejection (large wick beyond the level and a close back inside), the breakout is considered failed. In that case, stay out or consider a short (for a bullish breakout) or long (for a bearish breakout).
Decision: when the retest holds, enter in the direction of the original breakout with a stop just beyond the retest level. If the retest fails, refrain from entering and treat the move as a false breakout.
Enter only after a breakout retests and holds the broken level; a failed retest signals a false breakout.
#TradingTurtle #BreakoutTrading #PriceAction
You see a clear breakout: price moves beyond a well‑tested resistance (or support) with strong volume. The breakout alone tells you the market is attempting a new direction, but it does not guarantee sustainability.
Condition for action: after the breakout, price returns to the broken level and holds there for at least one candle without closing below (for a bullish breakout) or above (for a bearish breakout). The retest must respect the same volume profile that supported the original move.
Invalidation: if on the retest the price pierces the broken level and closes beyond it, or if the retest candle shows a clear rejection (large wick beyond the level and a close back inside), the breakout is considered failed. In that case, stay out or consider a short (for a bullish breakout) or long (for a bearish breakout).
Decision: when the retest holds, enter in the direction of the original breakout with a stop just beyond the retest level. If the retest fails, refrain from entering and treat the move as a false breakout.
Enter only after a breakout retests and holds the broken level; a failed retest signals a false breakout.
#TradingTurtle #BreakoutTrading #PriceAction