Introduction

It feels so great learning about this strategy called Break-Retest-Break. I feel so honored and privileged. All thanks to Prof @cryptokraze.

(1) Concept Of BRB

Most times in trading, during swing highs and swing lows, we seem to see some highs and lows on the chart. Most traders take advantage of these highs and lows and make good profits and at the same time, most traders lose funds a lot because they always think of buying at the resistance level and selling at the support level.

During a bullish trend, when an high is formed and there is a swing pull back, a trader can take advantage of that swing and make profit using the Break-Restest-Break Strategy.
Break-Retest-Break is utilized when market price movement of an asset breaks through a resistance or support and then keeps going in the direction of the original trend.

BRB Strategy At Resistance In Uptrend.

BRB strategy at Resistance simply depicts a buy signal when price breaks the resistance level during uptrend movement.
(Screenshot Below)

BRB Strategy At Support During Downtrend

BRB strategy at support depicts a sell signal when price of an asset breaks below the support level during downtrend movement.
(Screenshot Below)

Using the BRB Strategy should not be used without employing the stop loss as there could be a false breakout.

False breakout actually happens sometimes when there is a break through the resistance or support and shows a buy or sell signal but suddenly, a quick reversal sets in. More reasons why traders should make good use of stop loss and also wait for two or three candles before entering a buy or sell position.

Below are few manageable risks involved in BRB Strategy..

• Most times there are always price breakout and resistance gets a retest but instead of a rebound, the price keeps sailing down.

• When there is a price breakout and a continuous movement in the direction which price first started but refuses to retest. As a trader, I could be waiting for a retest but miss out entering a position.

• At times, after price had breakout in a clear uptrend and a trader think of entering a buy position. Just after placing a trade, the price reverses and retests.

As a remedy to avoid losing out completely of trading position, effective use of stop loss is of essence.

2(a). Resistance Areas Using BRB Strategy

Resistance areas are areas that confirms a buy signal for traders. As price breaks through the resistance, traders ought to wait for two or three candles to be formed before a buy position is entered.

2(b) Support Areas Using BRB Strategy.

Support areas, when there is a break through in price, confirms a sell signal. But two or three candles should be allowed to prevail before a position is entered as there could be a quick reversal.

3(a) Trade Entry Criteria Using BRB

• It is ideal to know discipline first before beginning any trade.

• Stop Loss just below the support level is a good trading practice

• Ensure that clear break above or below the resistance or support level is seen before a position is entered.

• Patiently wait for few candles to be formed for entry confirmation before entering a buy or sell position as there could be a quick reversal.

• Let price retest after a test before taking a resistance and support levels.

• Take profit is as ideal as stop loss should in case a trader is not available to watch the trade and the trade moved in a profitable direction.

3(b) Trade Exit Criteria Using BRB Strategy.

• Discipline is a great virtue in trading as it will help a trader exit with some profit that is booked and close the trade.

• If after the price break and it rebounds, it is necessary to exit trade.

• Stop loss and take profit ratio of 1:1 should always be employed. The 1:1 ratio could vary, depending on the experience of the trader.

4. Two Demo Trades Using BRB Strategy.

I'll be placing two demo trades with DOGEUSD pair and BTCUSD both on M1 chart.

M1 chart of DOGEUSD

After placing this trade, i waited for price to break out in the downtrend. After some minutes, there was a clear bear run and i scalped.

Below is another trade of BTCUSD on M1 chart

BTCUSD M1 chart

After some minutes of placing the trade, i realised a quick bear run which gave me some profit, i booked the profit and closed the trade.

Final Thought

Break-Retest-Break is a great trading strategy which good understand of the strategy will always orient a trader with fore trading knowledge and help a trader take advantage of good profitable positions.

Thank you.
Cc: Prof. @cryptokraze