Retest
A retest is price returning to a level it just broke, to test it. If old resistance holds as support (or the reverse), it supports the case for the move continuing.
How it works
First, price breaks an important level, such as resistance, and closes above it. Then it often pulls back and touches that level from above. If buyers defend it and price moves up again, the retest worked: old resistance became support. This is called a role reversal.
For a trader, a retest is a calmer entry than the breakout itself. You do not have to chase price: you can enter near the level and put the stop just beyond it. The stop is tighter, so the risk/reward is better.
A retest does not always happen. In a strong impulse, price can run without coming back, and you miss the trade. And if price comes back and settles on the other side of the level again, the breakout was false.
BTC struggled for weeks to get above 60,000. A daily candle closed at 61,500. Two days later price dipped to 60,100, left a long lower wick and closed back above 60,000. Entry around 60,300, stop below 59,400 (risk 900), target 63,000 (reward 2,700): R:R 1:3.
The reverse case: EUR/USD broke support at 1.0800, came back up to it from below and failed to close above it. The old support acted as resistance, and sellers pushed price lower.
A common mistake is entering on the first touch of the level without waiting for price to react. A touch is not yet a retest, just a return, and the level can break back. Wait for confirmation: a rejection wick, a candle close on the right side of the level or a reversal candle. Put your stop with some room beyond the level, not exactly on it, or normal noise will hit it.
Questions and answers
What is a retest in simple terms?
It is when price breaks a level, comes back to "check" it and bounces in the direction of the breakout. Old resistance becomes support, or old support becomes resistance.
How is a retest different from a false breakout?
In a retest, price touches the level and moves away again in the breakout direction. In a false breakout, it closes back on the other side of the level and keeps going against the breakout.
Does every breakout get a retest?
No. In a strong move, price can run without coming back. A retest is one way to enter, not a required part of a breakout.
Related terms
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Updated: 2026-10-19