Breakout Retest Strategy

A breakout retest occurs when price breaks through a key support or resistance level, then pulls back to retest that level (now acting as the opposite — support becomes resistance, resistance becomes support).

This is one of the most reliable setups in trading because you're entering in the direction of the breakout with a tight stop at the retest level. If the retest holds, you ride the continuation. If it fails, you take a small loss.

1. Identify a clear horizontal support or resistance level (minimum 2 touches) 2. Wait for a strong close beyond the level (breakout candle) 3. Wait for price to pull back to the broken level 4. Enter on a rejection candle at the retest 5. Stop loss: 10–15 pips beyond the retest level 6. Take profit: next major level or 2:1 R:R

The waiting is the hard part. Many traders jump in on the initial breakout and get caught in the pullback. Patience = higher win rate.

Breakout retests are ideal for prop trading because: - Tight stops (small risk per trade) - High R:R (2:1 to 4:1) - Clear invalidation (if the retest fails, the breakout was false) - Low frequency (1–3 setups per week on H1) - Works on all instruments

The low frequency might seem like a disadvantage, but it prevents overtrading — the #2 reason traders fail prop challenges.