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The core strategy

Break & Retest: a clear, mechanical process

We don't try to predict the breakout. We wait for evidence that it has survived the retest. The retest gives you the location. The confirmation gives you permission.

The 4 stepsChoosing your entryThe execution rules
Resistance becomes support Entry: close of confirmation Stop: below the retest low 1Breakout2Displacement3Retest4Confirmation

Illustration for teaching only, not a real trade or a recommendation.

1

Breakout

A strong bullish candle closes above the resistance zone. This is your breakout candle.

No entry yet
2

Displacement

The next few candles keep pushing higher. That tells you buyers are committed.

Still no entry
3

Retest

Price comes back to the breakout area and tests the old resistance as new support.

Still no entry
4

Confirmation

A bullish candle closes after the retest and proves buyers are back in control.

Now you have permission
Choosing your entry

Aggressive or conservative?

Sometimes the first candle after the retest confirms. Sometimes it takes the second or third. The market decides, not you.

Aggressive entry

Enter at the close, or the break of the high, of the first confirmation candle.

  • Better price
  • Smaller stop
  • Bigger reward compared with the risk
  • More false breakouts

Conservative entry

Wait for a second, stronger confirmation candle: one that closes near its high and clearly rejects the retest.

  • Higher probability
  • More proof that buyers are in control
  • Slightly worse entry and a larger stop
  • Smaller reward compared with the risk
The execution rules

Same rules, every trade

Execution is not about predicting the breakout. It's about waiting for evidence, then acting on your plan. Following these rules keeps you disciplined and stops you from chasing moves.

If there is no confirmation, there is no trade.

My execution checklist

  1. The breakout candle closes above resistance.
  2. Displacement confirms the buyers.
  3. The retest touches or holds the breakout level.
  4. Wait for one strong bullish confirmation candle.
  5. Enter on the close of that candle, or the break of its high.
  6. Place the stop below the retest low.

No confirmation, no trade.

Learn it properly in Foundation Trader

Module 9 teaches the full strategy, with entries, stops and the execution checklist.

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