Breakout Retest Entry

Entry Logic

Enter long when price retests the breakout level and finds support. Confirm with a bullish candle pattern (e.g., hammer, bullish engulfing) on the 1-minute chart. Entry trigger: 1-minute candle close above the retest low. Timeframe: 1-minute for entry, 5-minute for context. Location: Retest of a horizontal resistance level. Market condition: Trending after a consolidation.

Exit Logic

Target 1: 1.5R. Scale out 50%. Target 2: 3R. Scale out remaining 50%. Trailing stop 10 cents below the 1-minute 9 EMA. Exit if price closes below the 9 EMA after 1R profit. Exit if 15 minutes pass with no significant price movement.

Stop Loss Structure

Place hard stop 0.5R below the retest low. Max dollar loss $250. Max 0.75% portfolio loss. Structural stop below the consolidation pattern.

Risk Management Framework

Risk 0.75% of capital per trade. Max daily loss 3%. Max weekly loss 7%. Maintain 2:1 R:R minimum.

Position Sizing Model

Size to risk 0.75% of capital. Reduce size by 30% for B setups. Increase size by 20% for A+ setups. No scaling in.

Trade Filtering

Trade only stocks above $10. Avoid low-float stocks. Avoid earnings reports. Trade active stocks (volume > 2 million).

Context Framework

Daily chart must show bullish trend. Price must be above 20 VWAP. Retest should occur near 20 SMA on 5-minute chart. Higher timeframe (30-minute) should confirm breakout potential.

Trade Management Rules

Move stop to breakeven after 1R. Scale out 50% at 1.5R. Look for continuation patterns at higher prices. Manage fast moves by trailing tightly; slow moves allow wider stops.

Time Rules

Optimal window: 9:45 AM - 11:30 AM EST. Avoid 3:00 PM - 4:00 PM EST. Session notes: Mid-morning often provides clear retests.

Setup Classification

A+: Clear breakout, strong retest bounce on high volume, daily trend alignment. A: Good breakout, retest, moderate volume. B: Minor breakout, retest with less conviction.

Market Selection Criteria

Stocks with clear price levels. Average true range (ATR) > 0.75%. Relative strength to market.

Statistical Edge Metrics

Expected win rate 50-55%. Avg win 1.7R. Avg loss 0.8R. Profit factor > 1.3. Expectancy $150 per $100 risked.

Failure Conditions

Retest fails to hold. Price closes below breakout level. Volume is low on retest. Market condition shifts.

Psychological Rules

Be patient for retest confirmation. Do not anticipate entry. Trust the process. Avoid overtrading.

Advanced Components

Use order flow to confirm retest support. Monitor related sector performance. Align with 15-minute trend.

Location

Strongest at established support levels. Weakest in volatile, choppy markets.