Break and Retest Strategy: A Trader's Essential Technique

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The break and retest strategy is pretty powerful for traders hunting profits after breakouts. It works well. Even now in 2025, traders keep using it.

How the Break and Retest Strategy Works

Breakout Phase

Price smashes through resistance or crashes below support. Volume spikes. Something's changing. Look at the S&P 500 lately. Or Bitcoin. Big money moved in. Things exploded.

Retest Phase

Price pulls back. Tests what it just broke. Kind of fascinating how old resistance becomes new support. Or vice versa. The numbers don't lie. Bitcoin's behavior after hitting resistance seems to deliver nice returns over 30 days. Not always, but often enough.

Strategic Entry Point

Smart money waits. They don't chase breakouts. No. They wait for the retest. Better risk-reward that way. It's not entirely clear why this works so consistently, but markets have memory somehow.

Risk Management Parameters

Put stops below the broken level when buying. Above it when selling short. Take profits? That's up to you. Technical indicators help. Or just pick a target that feels right.

Why This Strategy Matters in Today's Markets

Higher Probability Trading Opportunities

Patience pays. Wait for that retest confirmation. Too many false breakouts out there. Forex markets in 2025 have been especially tricky. Fake moves everywhere.

Enhanced Risk Control

Tight stops work with retests. Less risk. Makes sense, right?

Optimized Entry Points

Better prices. Less chaos. Markets today are wild. Volatility is crazy across most assets.

Psychological Edge

When a retest works, it just feels right. Confidence builds. Trading gets easier.

For anyone trying to survive these 2025 markets, break and retest offers structure. It might lead to better results. No guarantees though.

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