Retest Trading Strategy

A RETEST refers to a situation where the price of an asset returns to a previously established support or resistance level after a significant move. This can occur after a breakout or a breakdown of the level, and traders watch for a retest as a potential opportunity to enter or exit a trade.

Here's how it works:

1. Identify a support or resistance level: This is a price level where the asset has had difficulty moving beyond in the past.
2. Observe a Breakout move: After a Breakout, either above or below the support or resistance level, traders will watch for a potential retest of the level.
   
3. Wait for a retest: If the price returns to the previously established support or resistance level, this is known as a retest.
4. Enter a trade: Based on their analysis of market sentiment, traders may enter or exit a trade at the retest. If the price breaks above a resistance level and retests it as support, a trader may enter a long position. If the price breaks below a support level and retests it as resistance, a trader may enter a short position.

It's important to note that not all retests result in a reversal of the price trend, and traders should use other technical analysis tools to confirm their trade decisions. Additionally, retests can also lead to false signals, so traders should be cautious and use proper risk management techniques.