How to Trade Retests of Breakout Levels


You ve probably heard of retests of breakout levels a few times. If you ve heard that the retest is a valid trading opportunity, you might be surprised to find out that they are also called fake outs. Fake outs are when a breakout level is touched by price and it then goes back to the previously formed level. This is where you should enter your trade. The first candlestick after a breakout is often a signal that the newly formed level is a good one to trade with.

If you ve ever seen a market structure break out and then return to it a few days later, you ve probably seen a retest of that breakout level. Often, these breakouts happen because traders need to fill their pending orders. These orders are made by traders before the market breaks out, but will be executed when the market reaches the level of the retest.

A retest occurs when the price falls back into the previous level. This means that the price will test the strength of the breakout level and if it is weak, the market will enter old support or resistance zones. When a breakout level breaks, traders should focus on the major support and resistance levels, which are usually more strong than minor levels and are harder to break. In other words, when price reaches a major level, the market is more likely to continue rising or falling.

When trading the Forex market, it is important to know when to trade retests of breakout levels. These levels often contain low-quality liquidity. This is why most traders prefer to trade retests that lead to new highs or lows. The downside of these levels is that they can be false breakouts, and it is important to be aware of the risks before you make a trade.

A break-out and retest strategy can help you enter a trade in the right position. Many traders chase a breakout and get in at the wrong time. They buy at the top and sell at the bottom. But if the retest does come, you could miss out on a big move. By trading a breakout and retest strategy, you ll get in at the right time, and you ll have the best chance of making a profit.

If you re unsure about breakouts, consider a professional trading mentor. A professional trader like Ezekiel Fuller is regarded as a top forex mentor and he gives back to the community. His own trading account is profitable, and he s also known for training forex traders in prop trading firms, fund management companies, and banks. In fact, he even won the Million Dollar Trader competition back in 2016. You can learn more about retests of breakout levels by contacting a forex mentor online.

Author: My Forex Rebate
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