What is a retest in trading?
In one line: A retest is when price breaks past a level, then comes back to touch that same level from the other side before moving on or failing.
A simple example
A stock has turned down at $60 three times. That's Resistance.
- A candle body closes at $61.40. Price has broken out.
- Over the next few candles it drifts back to $60.10.
- Buyers step in near $60. Price turns up again and closes at $62.
Step 2 is the retest. The old ceiling at $60 acted as a floor this time. Traders call this "resistance turned support."
Why traders watch it
A retest can give a calmer entry than chasing the break. Compare:
- Buy the breakout at $61.40, stop below $59.50. Risk: $1.90 a share.
- Buy the retest near $60.20, stop below $59.50. Risk: $0.70 a share.
Same stop, much less risk per share. Or the same dollar risk with more shares. The position size calculator does that math. A math example, not a promise.
The catch
Not every breakout retests. Strong moves can run away without looking back. Wait for a retest and you may miss them.
And a retest can fail. If a body closes back below $60, the break was likely a Fakeout.
Why it matters
The retest answers a simple question: did the level really flip? A bounce off the old level from the other side is evidence. A close back through it is evidence the other way.
A common mistake
Buying the touch without any sign it held. Price reaching the old level isn't a retest that worked. It's just a touch. Wait to see price turn away from it, for example a candle that closes back in the breakout direction.
Mark the broken level, then set an alert there. When price comes back, look at how the candle closes, not just whether it touched.
Learn more in breakout vs fakeout and the trade-offs in breakout vs pullback trading.
Questions
Does price always retest after a breakout?
No. Many breakouts retest, many don't. Strong moves often keep going without coming back.
How do you confirm a retest?
Watch whether price turns away from the level. A candle body closing back in the breakout direction is one simple sign. A body closing back through the level suggests a failed break.
Is a retest the same as a pullback?
A retest is a kind of Pullback: one that comes back to the exact level price broke.
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