Breakout Strategy Question

The question is, are you planning on entering off the retest of the BOS or CHoCH level or do you plan on entering where the retracement ends after price violates the BOS/CHoCH level? In most cases price will correct back past the BOS or CHoCH level before resuming the trend.

Looking back at GBPUSD in a trending market on the H1, there are 8 BOS/CHoCH and only 1 of them retested just a CHoCH level and another 1 came close to retesting a BOS level. The rest retraced and violated the level before resuming. In most of these cases selling at the retest of the broken level would be selling at a discount or buying at a premium.

You’re suggesting to rely on a broken weak high (resistance in an uptrend) or broken weak low (support in a downtrend) to become a strong level of support or resistance once broken. The charts suggest that it doesn’t work that way.

You’re on the right track with your overall logic of using a BOS or CHoCH, but you might get better mileage trading a breakout of consolidation and trading from an area of value in a trending market.

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