“Pullback After Breakout Entry”

**A Very Strong Classic Trading Strategy:

“Pullback After Breakout Entry”**

Below is a simplified and detailed explanation of what happens on the chart.

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🔵 1. The Concept

Instead of buying immediately when price breaks above resistance (which is risky because the breakout might be false), this strategy waits for the price to return to the broken level to “retest” it.

If the level now holds as support, the entry becomes much safer.

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🔵 2. Steps of the Strategy (as shown in the chart)

• Resistance Area (Resistance)

At first, price struggled to break above the gray line (the ceiling).

This formed a strong resistance zone.

• The Breakout

Strong bullish candles (long green candles) broke above the resistance decisively.

At this moment, the resistance becomes a:

> Demand Zone (Support)

Meaning buyers have taken control.

• The Pullback (Retest)

After rising, price pulls back (red candles) to touch the gray demand zone again.

This movement is called the retest or pullback.

• The Confirmation Candle (The Signal Candle)

Look at the candle inside the light blue circle:

It has a long lower wick (Pin Bar or Hammer).

This shows sellers pushed the price downward,

but buyers were strong and pushed it back up before the candle closed.

This creates a powerful entry signal.

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🔵 3. The Trade Plan (Execution)

• Entry Point

Place your buy order above the high of the confirmation candle

(the candle with the long wick).

This confirms that upward momentum has started.

• Stop Loss

Place it below the demand Zone (gray rectangle)

or

below the wick of the entry candle.

This protects you in case the pattern fails.

• Initial Target

The first take-profit target should be the previous high,

the level price reached before pulling back (the dashed upper line).

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🔵 Summary

You wait for:

1. A breakout above resistance

2. A pullback to the broken level

3. A reversal candle (like a hammer) at the retest

4. Enter above the signal candle

5. Stop loss below the zone

6. Target the previous high

This gives you higher accuracy, lower risk, and avoids chasing price during strong moves.

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