How to Trade Bullish Retest Entries
1. Identify Market Structure
Check if the market is in an uptrend (higher highs and higher lows).
Spot key demand zones, resistance levels, and order blocks (small consolidation areas before a big move).
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2. Wait for a Rally
Let the price rally (move up) from a demand zone or break through a resistance.
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3. Mark the Retest Zone
After the rally, mark the area it might come back to:
A demand zone
A previous resistance turned support
An order block
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4. Wait for Price Action Confirmation
When the price comes back to your zone, watch for:
Rejection wicks (candles with long lower shadows)
Bullish engulfing patterns
Pin bars or bullish candle formations
This shows buyers are stepping back in.
5. Enter the Trade
Enter your buy (long) position at the retest zone after confirmation.
Or set a buy limit order slightly above the zone if you expect a bounce.
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6. Set Your Stop Loss
Place your stop loss just below the retest zone to manage risk in case the setup fails.
7. Set Your Take Profit
Look for the next resistance or previous swing high as your target.
A good rule is to aim for at least 2:1 reward to risk ratio
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Example: Demand Retest
Price rallies from a demand zone.
Comes back to retest the zone.
You see a bullish engulfing candle or rejection wick.
Enter the trade.
Stop loss below the demand zone.
Take profit at the next resistance level.