Break and Retest
BullishContinuationBeginnerDon't chase the breakout. Buy when price comes back and the old ceiling holds.
Verdict: SkipBitcoin 4H: 14 trades, won 29%, avg trade −1.2% vs random day +0.3% (too few trades to judge). Backtest
Price hits the same ceiling twice and gets pushed back both times. That's resistance.
step 1/7
Trade rules
| Direction | Long (buy) |
|---|---|
| Entry | Two equal main swing highs make resistance. After a close above it, price runs 2% (Bitcoin) or 2.5% (stocks) higher, then returns to within half an ATR of the level within 30 candles. Within 3 candles of touching it, a candle CLOSES above the previous candle's high. |
| Cancelled if | A close more than half an ATR below the old resistance, a candle trading below the retest low before the entry, or no retest within 30 candles. |
| Target | Range height, projected from the breakout |
3 common mistakes
- Buying the first touch of the level instead of waiting for a candle to close back up.
- Calling any pullback a retest: price has to come back to the actual broken level.
- Keeping the trade after a close back below the level. The flip failed; get out.
Backtest
same rules every time · equal size · no fees · method| Market | Trades | Won | Avg trade | Random day |
|---|---|---|---|---|
| Bitcoin · 4H · 2017-2026 · too few trades to judge | 14 | 29% | −1.24% | +0.25% |
| US large caps (50) · 1D · 2016-2026 | 99 | 41% | +1.09% | +1.10% |
Verdict: SkipIt made money, but less than buying on a random day. Bitcoin had too few signals to judge.
pattern +108%random +109%