In this lesson, we’ll break down four bearish retest entries commonly used by traders: Break Block Retest, Supply Break Retest, Fibonacci Retest, and Structure Retest. We’ll explore how noobs and pros approach each of these entries and how you can elevate your trading skills from beginner to expert.
1. Break Block Retest
Noob Approach:
A noob may identify a break block but enters hastily without waiting for a proper retest confirmation. They often miss the ideal entry point and enter too early, resulting in fakeouts or getting trapped.
Pro Approach:
A pro waits patiently for a price break of a significant block and confirms the retest of this broken block. They look for confirmation signals such as rejection candles (e.g., bearish pin bars) or volume spikes before entering. Entry: On confirmation of rejection, setting a stop-loss above the retest zone and targeting lower price levels.
Key Tips:
- Always wait for clear rejection.
- Use smaller time frames to fine-tune the entry if necessary.
2. Supply Break Retest
Noob Approach:
Noobs often recognize the supply zone break but fail to wait for the price to retest and confirm resistance. They enter impulsively, resulting in losses when the price moves back into the supply zone.
Pro Approach:
A pro waits for the supply zone to break and retests as resistance. Confirmation comes from bearish patterns or volume exhaustion. Entry: Once confirmed, place a stop-loss above the supply zone with targets set lower based on the market structure.
Key Tips:
- Watch for lower highs and bearish signals on the retest.
- Understand the importance of supply zones and the reaction upon retesting.
3. Fibonacci Retest
Noob Approach:
Noobs commonly misuse Fibonacci levels, entering trades at random points without understanding why the price is reacting at specific levels. They might not wait for a proper signal, entering solely because a level was touched.
Pro Approach:
Pros use Fibonacci retracement (e.g., 61.8%, 50%) as potential reversal points but wait for price action confirmation. They look for rejection candles, divergence, or a break in momentum as additional entry confirmation. Entry: Upon confirmation, set a stop-loss just above the Fib level with targets based on the overall trend.
Key Tips:
- Combine Fibonacci levels with other technical indicators for better confirmation.
- Avoid entering just because the price touches a level; wait for a proper signal.
4. Structure Retest
Noob Approach:
Noobs might enter as soon as the structure is retested without considering the strength of the rejection or market sentiment. They often neglect other confirmations and focus solely on the structure.
Pro Approach:
Pros identify key structural levels (support turned resistance) and wait for price rejection on retest. They ensure the retest aligns with overall market trends and confirm entries with bearish signals. Entry: Place a stop-loss above the structure with clear profit targets aligned with the prevailing trend.
Key Tips:
- Ensure the structure aligns with broader market analysis.
- Use multi-timeframe analysis to confirm the validity of the retest.
Final Thoughts
Transitioning from noob to pro in trading requires patience, discipline, and a strong understanding of retests. Always combine retests with other technical signals for a higher probability setup. Master these retest strategies, and you'll be well on your way to becoming a more confident and successful trader!