What it looks like
Start with a clear swing high (a peak with lower highs either side) or swing low. For the bullish version, a candle closes above the swing high, price moves on, then pulls back and touches the old high from above. The touch candle should leave a wick into the level and close above it. The bearish version is the mirror: a close below a swing low, a pull back up into it, and a candle that touches it from below and closes back under it. The level is the key: the retest should come back to within a few points of where the break happened, not far beyond it.
What it means
Before the break, the level was where one side kept winning: sellers stopped every rise at the old high, or buyers caught every fall at the old low. The break shows that side lost. When price comes back and the level holds from the other side, traders who missed the break get a second chance and traders caught on the wrong side are often getting out at break even, both of which push price away from the level again. That is why it is one of the cleanest entries: the stop sits close, just beyond a level that has already proved it matters.
Bullish and bearish versions
How to trade it
- 1
Mark the swing high or low that was broken, and wait for price to come back to it. Do not chase the first break.
- 2
Confirmation: a candle that touches the level and closes back on the breakout side (above it for the bullish version, below it for the bearish).
- 3
Entry: buy (or sell) as that candle closes and the level holds.
- 4
Stop: just beyond the level, plus a small buffer for spread. Example on gold: a swing high at 4,050 breaks, price returns to 4,051, the retest candle closes at 4,056. Buy at 4,056 with a stop at 4,046, a 10 point risk.
- 5
Target: the next swing high or key level, or a fixed multiple of the stop such as 2 times (20 points on gold, aiming for 4,076).
A candle closing back through the level: below it for the bullish version, above it for the bearish version. A wick through that closes back on the right side does not cancel it.
Where it works best
On clear, obvious swing levels that many traders can see, such as the previous day high or low on gold or US30, and in a market that is already trending in the direction of the break.
WickSpeak finds break and retest setups automatically and names them on the candles that made them, bullish or bearish. Each one carries a plain-English note: what it is, how to trade it and the close that would prove it wrong. In Playbook you can use it as a condition in a play, alone or alongside other patterns and indicators (any of the 146 patterns can be a condition), and backtest it on past candles with your own costs.
Common mistakes
- Buying the first break instead of waiting for the retest, which puts the stop far away.
- Treating any return to the level as a retest, even when price closes back through it.
- Placing the stop exactly on the level with no buffer, so normal spread and wicks take it out.
Related patterns
Questions traders ask
Is break and retest a good strategy?
It is one of the most popular price action entries because the stop can sit close to a level that has already mattered. It still fails, usually when price closes back through the level. Test it on your own market and timeframe before trading it live, for example with a backtest.
How do you confirm a retest?
Wait for a candle that touches the broken level and closes back on the breakout side. A wick into the level is fine; a close through it is not. Some traders also want the next candle to move away from the level.
Where should the stop go on a break and retest?
Just beyond the level that was retested, with a small buffer for spread. On gold that is often 5 to 10 points beyond the level on lower timeframes, depending on how volatile the session is.
What if price never comes back to retest?
Then there is no retest trade. Strong breaks often run without looking back, and chasing them breaks the logic of the pattern. You can wait for the next level or a smaller pullback pattern such as a bull flag.