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BEGINNERBreakout + RetestTESTING

1. Breakout and Retest

Do not chase the spike: wait for the break, the retest and a confirming candle.

Download PDF lessonPractise in a challenge

2.What it is

Price closes decisively beyond a level it has respected, then comes back to test that level from the other side. If the level holds as new support (or resistance), you enter in the direction of the breakout with the stop beyond the level.

In simple words

Many breakouts fail, and the first spike is the riskiest place to join. Instead, let price break out, wait for it to come back and touch the old level, and only enter if that level now holds.

3.Why it may work

A level that mattered before often keeps mattering after it breaks, because traders who were wrong at the level exit and traders who missed the break enter on the retest. Waiting also filters many false breakouts, at the cost of missing moves that never retest.

4.Best market conditions

  • A clear, repeatedly respected level or range edge
  • A decisive candle close beyond it
  • A shallow, orderly retest
  • Room to the next level

5.When NOT to trade it

  • The breakout candle is a tiny drift rather than a decisive close
  • Price closes back inside the old range
  • The level has been tested many times and is weak
  • News is about to hit

6.Timeframes

Entry: 15M, 30M · Context: 1H, 4H

Mark the level on the 1H chart and look for the retest on the 15M chart.

7.Entry rules and step-by-step setup

Entry rules

  • A decisive close beyond the level
  • A retest that touches or enters the level zone
  • A confirming candle that closes in the breakout direction

Step by step

  1. 1.Mark a level that price has respected at least twice
  2. 2.Wait for a candle to CLOSE beyond it (not just a wick)
  3. 3.Wait for price to return to the level
  4. 4.Look for a rejection or engulfing candle at the level
  5. 5.Enter with the stop beyond the level
  6. 6.If price closes back inside the old range, stand aside

8.Stop loss

Beyond the retested level (below the old resistance for a buy, above the old support for a sell), with a small buffer.

9.Take profit

The next structure level or a fixed 2R; consider taking part profit at 1R.

10.Risk / reward

At least 1:2. Retests give a tight stop, so the ratio is usually favourable when the setup is clean.

11.Confirmation

  • The retest candle shows rejection from the level
  • The next candle closes away from the level
  • The breakout agrees with the higher-timeframe direction

12.Invalidation

  • A candle closes back inside the old range
  • Price slices through the retest zone with a large candle

13.Common mistakes

  • Buying the breakout spike
  • Treating a wick through a level as a breakout
  • Ignoring a failed breakout
  • Placing the stop inside the old range

14.Example chart

Breakout and Retest example chartResistance zoneBreakout closeRetest holdsEntryStop (below level)Target 1:2
Resistance is tested twice, broken with a strong close, retested from above and held. The entry is the confirming candle after the retest. An illustrative diagram drawn by Bahari Academy: not real market data and not a prediction.

How it performed in our own backtests

TESTING

Backtested on 1119 trades but not verified: 6 of 9 checks not met (win rate above 50%; profit factor at least).

Win rate
32.1%
Sample size
1119 trades
Average planned RR
1:2
Profit factor
0.85
Worst max drawdown
31.6%
Average per trade
-0.106R
Tested timeframes
15m, 30m, 5m
Tested markets
BTCUSDT, ETHUSDT, SOLUSDT

Period 2026-03-09 to 2026-10-03 · OKX spot candles (real exchange history, closed candles only) · engine bahari-bt-1.0.0 · run on 2026-10-03 · 1% risk per trade, 0.05R extra cost per trade plus spread · one position at a time, ambiguous candles resolved stop-first · parameters fixed before running.

Approximation: a recent break of structure, then an engulfing confirmation back at a support/resistance zone, 1:2 target.

VERIFIED checklist

  • ✔Sample size of at least 300 trades(1119 trades)
  • ✘Win rate above 50%(32.1%)
  • ✘Profit factor at least 1.2(0.85)
  • ✘Average result per trade above 0.05R after costs(-0.106R)
  • ✘Worst max drawdown at most 25%(31.6%)
  • ✔Average planned reward:risk at least 1:1(1:2)
  • ✔Tested in at least 4 market/timeframe conditions (2+ markets, 2+ timeframes)(9 conditions, 3 markets, 3 timeframes)
  • ✘Profitable in at least 67% of the conditions(1 of 9)
  • ✘Profitable in BOTH halves of the history (profit factor at least 1 in each)(first 0.79, second 0.92)
Results per market and timeframe (9 runs)
MarketTFTradesWin rateTotal RMax DD
BTCUSDT15m12832%-14.624.16%
BTCUSDT5m11931.1%-18.131.57%
BTCUSDT30m13627.9%-31.028.52%
ETHUSDT15m10934.9%-1.515.98%
ETHUSDT5m11739.3%10.514.88%
ETHUSDT30m12029.2%-21.722.48%
SOLUSDT15m13333.8%-5.926.52%
SOLUSDT5m12931.8%-14.325.81%
SOLUSDT30m12829.7%-21.823.61%

Reading this honestly: VERIFIED needs 300+ trades, a win rate above 50%, profit factor 1.2+, drawdown under 25%, profit in at least two thirds of the conditions and in both halves of the history. A strategy that fails here can still be worth learning, but do not risk money on it before testing it yourself in the Strategy Lab.

Past and backtested results never guarantee future results. Nothing on this page is financial advice.

15.Quiz

1. What confirms a breakout?
2. After a bullish breakout, the old resistance often acts as:
3. Price breaks out, then closes back inside the old range. You should:
4. A downside of waiting for the retest is:

16.Practical challenge

Look for a break and retest in a challenge and decide whether the retest is a valid entry.

Open challengesTest it in the Strategy Lab

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