Price action and chart patterns
Break and retest
After price breaks a level, it comes back to test it from the other side: old resistance acts as new support (or the opposite).
Why it works
Traders who missed the breakout and those defending the new side meet at the level, so it often holds and the trend continues.
How to use it
Mark the broken level, wait for price to return to it and show rejection, and enter with the stop on the other side of the level.
The typical mistake
Entering the retest when price closes back through the level: the breakout has failed.
FAQ
What is Retest in trading?
After price breaks a level, it comes back to test it from the other side: old resistance acts as new support (or the opposite).
How do you trade Retest?
Mark the broken level, wait for price to return to it and show rejection, and enter with the stop on the other side of the level.