Many traders struggle and lose their initial capital, not because the market is inherently unfair, but due to a lack of a repeatable and disciplined trading system. However, with the right strategy, unwavering discipline, and effective risk management, even a small starting amount can be transformed into significant gains. Here’s a breakdown of the support breakout and retest strategy that helped me turn a mere $280 into over $70,000. 👇
🧱 Step 1: Identifying Key Levels - Support & Resistance
In trading, understanding support and resistance levels is fundamental:
Support: Think of it as a price floor where buying interest is strong enough to prevent further price declines. Buyers tend to "step in" at these levels.
Resistance: Conversely, resistance is a price ceiling where selling pressure overwhelms buying interest, halting price increases. Sellers are likely to act at these levels.
The magic happens when a significant support level is broken. Often, this broken support then flips and acts as a new resistance level. This "flipping" of levels is a key area where strategic traders look for opportunities.
📉 Step 2: The Breakout - Patience is Key!
The breakout occurs when the price forcefully pushes through a support level, usually indicated by strong bearish (red) candles.
A common mistake novice traders make is to immediately short (bet on the price going down) as soon as the support breaks. ❌ This is often premature. Smart traders exercise patience and wait for the next crucial step: the retest.
🎯 Step 3: The Retest Entry - High Reward, Lower Risk
The retest is when the price revisits the broken support level, which is now acting as resistance. This provides a high-probability entry point.
Entry: Look for rejection candles (price tries to go above but gets pushed back down) at this retested resistance zone. This indicates that sellers are indeed defending this new resistance.
Stop-Loss (SL): Place your stop-loss order just above the resistance level. This limits your potential loss if the trade goes against you.
Take-Profit (TP): Set your take-profit target at the next significant support zone below the entry.
This strategy is powerful because it often creates trades with a high Risk-to-Reward (R:R) ratio, such as 1:3 or even 1:5 or higher. This means for every $1 you risk, you stand to gain $3 or $5.
🚀 Step 4: The Power of Compounding
The real magic happens through compounding. By consistently risking a fixed percentage of your capital (in this example, 10% per trade) and targeting a minimum 1:3 Risk-to-Reward ratio, even small gains can snowball into substantial amounts over time.
Here’s an example of how $280 could theoretically grow with successful trades following this strategy:
$280 → $364 → $473 → $614 → $798 → $1,037 → $1,348 → $1,752 → $2,278 → $2,961 → $3,849 → $4,908 → $6,380 → $8,294 → $10,782 → $14,017 → $18,222 → $23,688 → $30,794 → $40,032 → $52,042 (approximately 21 trades with consistent 1:3 R:R and 10% risk - the original post's numbers had slight rounding differences, this reflects a more precise calculation).
With continued successful trades, reaching $70,000+ becomes a realistic possibility.
🏆 Golden Rules for Success
To effectively implement this strategy, adhere to these crucial rules:
Trade Clean Breakouts + Retests ONLY: Avoid forcing trades that don't clearly fit the criteria.
Strict Stop-Loss, Max 10% Risk: Protect your capital on every trade. Never risk more than you can afford to lose.
Always Target Minimum 1:3 R:R: Ensure that your potential gains significantly outweigh your risk.
Quality Over Quantity: Focus on taking 1–2 high-quality trades per week rather than chasing numerous random signals.
Let Compounding Work for You: Be patient and consistent with your strategy.
🔑 The Key Takeaway: Smart Trading Wins
You don't need a constant stream of trading signals to be successful. What you need is a solid, repeatable strategy and the discipline to execute it consistently. This support breakout and retest strategy, when applied with proper risk management, can be a powerful tool in your trading arsenal.
👉 Trade smart, not hard.
