Retests are one of the least exciting parts of trading, but they are also one of the most useful. A breakout tells us price moved. A retest tells us whether the market accepts that move.
If old resistance becomes support, buyers are defending the new level. If price falls back under the breakout area, the move may have trapped late buyers. This simple idea can prevent a lot of emotional entries.
I like retests because they give a cleaner stop. Instead of buying the middle of a candle, the trader can define exactly where the idea is wrong.
The trade-off is that some strong moves never retest. That is fine. Missing a trade is not the same as losing money. A clean process should survive missed opportunities.
If old resistance becomes support, buyers are defending the new level. If price falls back under the breakout area, the move may have trapped late buyers. This simple idea can prevent a lot of emotional entries.
I like retests because they give a cleaner stop. Instead of buying the middle of a candle, the trader can define exactly where the idea is wrong.
The trade-off is that some strong moves never retest. That is fine. Missing a trade is not the same as losing money. A clean process should survive missed opportunities.
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