Crypto Academy / Season 3 / Week 3 - Homework Post for @cryptokraze | Break Retest Break (BRB) Strategy to Trade Continuation

Homework: Break Retest Break (BRB) Strategy to Trade Continuation
Professor @cryptokraze.
Written by @chinma

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1 What do you understand about the Concept of Break Retest Break Strategy? Give Chart Examples from Crypto Assets

Trading strategy is what most traders’ use in analyzing market before taking the bold move to either buy or sell. It varies from trader to trader depending on what a trader knows that is what determines his or her strategy. This can be achieved by study and properly understanding the market.
Poor Trading strategy can lead to loss of money or even whole capital while trading.

So today, we are looking at one of the strategy, the Break Retest Break (BRB) Strategy.
What is Break Retest Break Strategy?
Firstly, Every Trader in Market most know what a Support and a Resistance is, in a market structure and to properly locate them. Understanding what the Support and Resistance line in a Market structure will be a great advantage to you while using the BRB Strategy to analyze the market.

Now Break is when a price moves across either a support or resistance while Retest is simply a reversal movement of price after cutting across the resistance or the Support. Break Retest Break strategy is whenever a price break through a support or resistance and moves back to test the support or resistance before moving ahead in respect to the initial direction of the price. The breakout mostly happens after price has consolidated for long and it has formed a channel there. It mostly occurs during the bigger time frames.

What is the Break Retest Break Strategy at the support level?

After identifying your support line properly, which supposed to be below, when the price makes a bearish movement towards the support line and breaks the line with a small continuous bearish movement toward the down, and suddenly reverses to test the support one more time before moving downwards. It usually forms a Zigzag downward line in the process.

Chart of BRB strategy on Support level, Picture from Tradingview

What is the Break Retest Break Strategy at the resistance level?

After identifying your resistance line properly, which supposed to be above, when the price makes a bullish movement towards the resistance line and breaks the line with a small continuous bullish movement toward the up, and suddenly reverses to test the resistance one more time before moving upward. It usually forms a Zigzag upward line in the process.

Chart of BRB strategy on resistance level, Picture from Tradingview

2. Mark important levels on Crypto Charts to trade BRB strategy. Do it for Both Buy and Sell Scenario.

For Sell Scenario Using the Break Retest Break Strategy:

Chart of BRB levels for Sell Scenario, Picture from Tradingview

For me to take the sell the order, I have firstly drawn my support line should be really accurate, then you need to wait for the price to make it first break through the support, it is still advisable to wait for a retest, once the price retest the support line still wait for a reversal movement of the price before executing a sell order. You can use a 1:1 Risk to Reward ratio. And you can see that the timeframe is a large one which is 1 hour and the profit margin is very large.

Major levels

• Support level (Price breaking support level and later retesting it
• Swing high levels (Previous swing low level, price forming a swing low retracing and coming back to break that swing low)

For Buy Scenario Using the Break Retest Break Strategy:

Chart of BRB levels for Buy Scenario, Picture from Tradingview

For executing a buy order using the break retest break strategy, you must look for your market structure properly, ensure that your resistance line properly drawn, after properly drawing your resistance line, you have to wait for the price to break through the resistance line. Still don’t execute any trade order. Allow the price to retest the resistance once, after retesting the resistance, if the price starts it reversal moving upwards, you can execute you buy order. Ensure you use the proper Risk to Reward ratio which I always advise to you to use 1:1.

Major levels

• Resistance level. (Price tending towards resistance level, breaking it, later coming back to retest it before returning to higher levels)
• Swing high levels. (Price forming a swing high level, retracing then later coming back up to break this swing high level forming a new one)

3. Explain Trade Entry and Exit Criteria for both Buy and Sell Positions on any Crypto Asset using any time frame of your choice

Trade Entry Criteria for Break Retest Break Buy strategy

Chart of BRB levels for Buy Scenario, Picture from Tradingview

Before entry for a buy position, you need to look at for the market structure properly. Rallying markets or markets in trend tend to better follow Break Retest Break strategy. Watch the market to market trends tending towards a suspected resistance level.

Now mark your resistance level. before you execute any trade, it is of very high importance that you should determine your Resistance line properly.
Allow the price to break the resistance line.

Still allow the price to move some pips forward and watch closely for a retest on that line of resistance.
Before Entry the buy order allow the price movement to have retested the resistance line and it is moving back then breaking the former High. You can now enter your Buy Trade.

You can now set your Stop loss in the closest support line and your take profit at the closest resistance line depending on your choice, But a (1:1) Risk to reward Ratio is best.

Trade entry for sell position

Chart of BRB levels for Buy Scenario, Picture from Tradingview

As I have said early, properly examine your market structure properly, look for a good channel or where the market is moving downwards, Look if price is pulsating downwards forming a zigzag like structure when it hits support lines, then anticipate the next support line.

Now mark and properly examine your Support line, or else you will miss the entry
Now wait for the price to break through the support line, moving downwards
Allow the price to retest the support line, you have to notice that sometimes it doesn’t always touch the support line.

Once you notice that the price that completed its retest on the support line and is sliding down back breaking the previous low, You can execute the sell order
Ensure you put a proper stop loss at the next support line upwards.

Trade Exit Criteria for Break Retest Break strategy

No matter the strategies use while trading, there is no assurance it must go in your favour, so trade exit strategies are needful.

Steps to Exit Buy trade when in Profit:

• Use a take profit of (1:1) Risk:Reward ratio, to avoid holding trades till retracement and making loss
• When market hits take profit, close the trade then watch for a new position

Steps to Exit Buy trade when in loss

• When placing a trade, always add a stop loss a little above the previous resistance level incase price goes against you
• If market goes against you your stop loss closes the trade

Steps to Exit Sell trade when in Profit:

• Use a take profit of (1:1) Risk:Reward ratio, to avoid holding trades till retracement and making loss
• When market hits take profit, close the trade then watch for a new position

Steps to Exit sell trade when in loss

• When placing a Sell trade, always add a stop loss a little above the previous resistance level incase price goes against you
• If market goes against you your stop loss closes the trade

4. Place 2 demo trades on crypto assets using BRB Strategy. You can use lower timeframe for these demo trades

From the lecture, we have seen that the Break Retest Break Strategy seems profitable strategy looking at the numerous examples. More the Break Retest Break strategy works with strong price trends, hoping to follow along with the trends when strong signs of continuation appear.
Making trades, I will be using the Binance exchange:

First Trade

We see the BNB/USDT is making a new swing high, trying to break the previous swing high after retesting its immediate support once resistance to the previous swing high.

picture from Binance.com

We take the trade just above the previous swing high. Trade details below:
We watch the trade manually since I couldn’t set a stop loss with the Binance exchange and make our stop loss be at 321.00USDT and take profit at 323.50USDT.

Picture from Binance.com

Second Trade

We see the DENT/USDT is trying to break its previous swing high also(When screen shot was taken price had jumped a little bit down).
We quickly take our trade, with minimum buyable DENT at 10 USDT, we buy 11USDT worth of DENT to cover also for trading fee.

Picture from Binance.com

Looking order book above, there is no space for stop loss and take profit, so we watch manually taking stop loss in our mind as 0.00204USDT and take profit at 0.00207USDT .
All trades made with the BRB strategy, we expect profit though anticipate loss.

Picture from Binance.com

Conclusion

Trading is serious business one should always try to find the right strategies for each price pattern before trading.

We should also master drawing our support and resistance levels, and trading strategies before using them for life trades.

Thanks to @cryptokraze for telling us of this wonderful strategy.

CC
@cryptokraze