Trading the first pullback of a breakout: what's your entry?
The breakout itself is often a trap; the first pullback is where the patient money enters. The trade: wait for the break, wait for the retest, enter with the stop under the retest's low.
How do you trade it?
- the criteria the retest must meet
- your entry trigger on the pullback
- what you do when the retest never comes
The support and resistance guide explains the flip mechanics behind the retest.
Background: Support and resistance: how traders mark price levels
Support and resistance are the most widely used ideas in chart reading. How to find levels, why they work as zones, and what happens when they break.
What is support and resistance in forex?
Support is a price area where falling prices have tended to stop, and resistance is an area where rising prices have tended to stall, often because many orders cluster there.
What happens when support breaks?
The price often falls further, and the old support level frequently acts as resistance if the price comes back up to it.
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