How a RETEST works - with Trade IDEA - Pullback explained

(Note for professional Traders: If you have some experience on this strategy or
if you feel like something is missing, please comment, so everyone can benefit from it :) Thanks in advance!)

Hi Traders!
Have you ever been in this situation:
The market is clearly in an Uptrend.
Big, Green Candles moving up.
Making higher highs and lows.
Breaking all the major Resistance.
Because of all of this, you hit BUY.
Now...
The market makes a 180° U-turn.
You see your trade is losing.
The Big green candles are now red candles.
Falling towards the Support.
Let's move on...
You think, the Up-Trend is over now.
You now see some red candles in the chart.
You think the trend has changed.
You want to be the one how rides the huge Down-Trend.
You hit SELL.
OK...
The market uses this Support and is Continuing the Up-Trend!
Ouch :(

So, in this idea you'll discover what those so called "Retests" are.
Ask yourself: When does a Retest occur?

If you think correctly, you might have a picture of a breakout in your head.
This Breakout can be anything:

• Support and Resistance
  
• Trendline
  
• Fibonacci Levels
  
• Parallel Channel
  
• SMA 20, 50, 200 ...
  
• EMA or other trending indicators
  
• etc. think of anything
  

After the Breakout the Retest can occur at any time.
NOTE: A Retest does not occur on every Breakout! The market occasionally breaks out without a Retest.

Here we listed some "sorts" of the Retest:

• The "classic" Retest
  This is the kind of Retest which you can find in every trading book.
  Let's get an example:
  
  The market just broke out from major Resistance.
  Since there is price action in the movement, the price even moves a few pips further.
  It suddenly stopped, made a 180° U-turn and it makes a Pullback.
  It tested the previous Resistance (now it is a Support) and continues higher.
  
  What you can use to predict the Retest is over:
  - use the 20MA
  In a strong Trend the 20MA is often the key level many traders are watching.
  So if you notice that the market and the 20MA are far away from each other, than wait for a Retest.
  If both are touching each other, the market often continues higher.
  
  - use false breakouts
  If you notice that the Support gets broken and fastly comes back, this is a sign that bullish power exists.
  Buy the False Break.
  
  - use other indicators
  It is also possible to trade it with Bollinger Bands or Parabolic SAR...
  
  
• The long Retest
  As you can see in the third example of the chart, the market broke out and immediatly retests the trendline.
  Then it moved very long on the other side of the trendline and finally moves further.
  If you zoom in, you can notice a little Trendline which gets broken.
  This could serve as an Entry Trigger.
  
  
• Watch out for other sorts
  These Retests can - as every pattern in trading - come up in every kind.
  You have to watch it yourself!
  

In the chart of USDCAD we highlighted three (potentially four) Examples of the Retest.

We hope that we helped you with this idea.
Please like, follow and comment!

Thanks and successful Trading :)!