What is Retest?
Qayta test
In short
Price returning to a level it just broke through to test it from the other side.
A retest is when price, after breaking through a level, comes back to it and tests it from the other side. For example, a stock that broke above $30 resistance drifts back to around $30 a few days later and bounces from there.
Why it matters
A retest is a practical way to check whether a breakout is real. If the level now plays the opposite role — old resistance acting as support — that confirms a role reversal. If price slips back through the level easily, the breakout was false.
How it is traded
- You don't enter right after the breakout; you wait for price to come back to the level.
- You look for a reaction around the level: a hammer, an engulfing candle, shrinking volume on the pullback.
- The stop goes on the other side of the level — closer than if you had bought the breakout.
The result is a better risk/reward for the same target.
Limitations
The strongest breakouts often leave without a retest, so a trader waiting for one can miss the move. Also, a retest hits a zone around the level, not an exact price: price dipping slightly below the level and then recovering is normal. For a downside breakout everything is reversed: price comes back up to the broken support and it acts as resistance.
The breakout came on high volume; price came back to retest the old resistance and bounced off it.
Example
Illustrative case: a stock breaks above $30 resistance on volume and climbs to $32.50. Three days later price drops to $30.20 and prints a hammer, with volume shrinking on the down days.
The trader enters at $30.80, stop at $29.40 (below the level), target $33.60:
- Risk: $30.80 − $29.40 = $1.40.
- Reward: $33.60 − $30.80 = $2.80.
- R:R = 2.80 ÷ 1.40 = 1:2.
For comparison: a trader who bought the breakout high at $32.50 with the same $29.40 stop would be risking $3.10 to make just $1.10.
Mistakes and tips
Touching the level during a retest isn't a signal on its own — wait for a reaction (a candle, volume).
A pullback on light volume is a good sign: sellers aren't aggressive, it is just a pause.
If price doesn't come back, don't chase — wait for the next setup, or decide in advance on a rule for a small starter position.
Frequently asked questions
- Does a retest always happen?
- No. Price comes back to the level after many breakouts, but the strongest moves often continue without one.
- What if price drops below the level during the retest?
- Dipping slightly below and recovering quickly is common. But if price closes well below the level, the breakout is considered to have failed.
Learn it in the Academy
This term is covered with hands-on examples and a quiz in these lessons of the interactive course.
- Support and resistanceHow levels form, how to draw them as zones, how to tell breakouts from false breakouts, and how to plan entries, stops and targets from them.Open lesson · 11 min
- Chart patterns: head and shoulders and trianglesHead and shoulders and the three triangles: anatomy, psychology, neckline, measured-move targets, retests, volume and failed patterns.Open lesson · 12 min
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