I just realized that one of the most effective strategies used by many professional traders is Break and Retest. It is a quite common technique, but not everyone understands clearly what retest is and how to apply it correctly.

Its operating mechanism is quite simple but powerful. The first step is Breakout - when the price surpasses the resistance level or falls below the support level with high trading volume, indicating a potential trend change.

But the interesting part lies in the next phase. After breaking through, the price often pulls back (which is what retest is - the process of the price re-examining the broken level). At this point, the old level will switch roles - becoming support if it was a breakout upward, or resistance if it was a breakout downward. This is the golden moment for traders to step in.

Why do I like this strategy? Because it allows entering the trade at a better position than jumping in during the breakout. When the retest occurs, you have the opportunity to set a tighter stop loss, which helps manage risk much more effectively.

Psychologically, retest also provides additional confirmation for the breakout. When the price returns to the old level and bounces up, or down from there, it shows that this support/resistance level truly has significance. This helps you trade with greater confidence, not just based on intuition.

In fact, this strategy increases the probability of successful trades because you wait for confirmation instead of entering immediately during the breakout. The risk/reward ratio also becomes more favorable when you understand what retest is and when to enter.

If you want more consistent trading results, understanding and correctly applying the Break and Retest strategy will be a smart step. I usually monitor potential breakouts on Gate, then wait for the retest to enter the trade with well-controlled risk.