Why is Waiting for a Retest is Important? Learn Trade with Me.
What Is a Retest in Trading? (Super Simple Explanation For You)
A retest happens when price breaks through a support or resistance level, and then comes back to that same level to “check” it before moving further in the breakout direction. Check below attached image.
This helps traders see if the breakout is real and not a fake move.
1. Breakout (The First Move)
Price moves strongly above resistance or below support.
This shows a possible change in market direction or momentum.
2. Retest (The Check)
After the breakout, price often pulls back to the level it just broke.
If resistance was broken, price comes back and tests it as new support.
If support was broken, price comes back and tests it as new resistance.
This is the market “checking” the level again.
3. Confirmation (The Most Important Part)
Traders wait to see if the level holds in its new role.
Signs of confirmation include:
Rejection wicks
Strong reversal candles (like a pin bar or engulfing pattern)
Lower volume during the pullback
If the level holds, the breakout is more likely to be real.
Entry (Where Traders Often Enter)
Traders usually enter after they see clear rejection of the retest level and price begins moving again in the direction of the breakout.
This is considered a high-probability entry.
Why Wait for a Retest?
1. Avoids Fakeouts
Many breakouts fail.
Waiting for the retest helps you avoid entering too early and losing money.
2. Better Entry Price
When price pulls back during the retest, you can enter closer to the key level, giving you a better risk-to-reward ratio.
3. Clear Stop-Loss Placement
The retest level gives you a logical place to put your stop-loss
(e.g., just below new support or above new resistance).
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