Breakout and retest
Price clears a level, then comes back to it
What it is
Price closes decisively through a level, then returns to it. If the old resistance now holds as support, the break is described as confirmed.
What it may suggest
A retest that holds gives a much tighter invalidation than chasing the initial break, so the payoff is usually better.
Where it fails
Plenty of real breaks never retest, so waiting means missing some. And a retest that fails to hold is a failed break, which often reverses hard.
Also called breakout, retest, break and retest, failed breakout.
More concepts
- InvalidationThe price that proves you wrong
- Risk-to-rewardDistance to target versus distance to stop
- Position sizingHow much, given where the stop is
- Liquidity sweepA push through an obvious level, then straight back
- ConfluenceSeveral independent reasons pointing the same way
- Timeframe alignmentChecking the bigger chart agrees
ChartPeak is an educational tool. It is not financial advice and does not make investment recommendations. Trading carries a risk of loss, and past performance does not indicate future results. Do your own research.
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