The strategy relies on a key principle of price action: once a significant level is broken, it often switches its function.
The is a foundational technical analysis method designed to identify high-probability entry points by waiting for market confirmation after a breakout. This approach helps traders avoid "false breakouts" (fakeouts) by ensuring that a broken support or resistance level has successfully flipped roles before committing to a trade. Core Principles of the Strategy
Traders look for confirmation candles at the retest level, such as pin bars , engulfing candles , or long-tailed hammers , indicating that the level is holding. Entry and Risk Management Rules
In a bullish breakout, the price rises above resistance and then pulls back to test it from above. The Three-Step Execution Process