Break and retest simplicity

Trading notes for 2026-02-25

TL;DR

Executed a successful break and retest trade targeting previous week's highs, using Bitcoin's breakout as confluence. The market delivered as expected, running into a 4-hour supply zone at the trend line to close the session.

Market Context

The market was approaching previous week's highs, setting up a classic decision point. This created a binary scenario where price would either grab liquidity from the highs and reverse, or establish a genuine break and retest pattern for continuation higher.

The key technical question was whether we were witnessing a liquidity grab setup or a legitimate breakout scenario. Market structure at this level would determine the next directional move.

Thesis & Plan

My thesis centered on identifying which scenario was developing at the previous week's highs. The setup required patience to read the price action behavior once we reached those levels.

The plan was straightforward:

• Wait for clear signals at the previous week's highs
• Look for confluence from correlated assets
• Enter on a break and retest if the behavior supported continuation
• Target the obvious technical levels above

I needed to see convincing price action that suggested genuine buying interest rather than a fake-out move designed to trap longs.

Entries & Exits

I entered the break and retest trade after observing key behavioral clues. The price action showed strength at the highs rather than the typical signs of exhaustion you'd expect before a reversal. This suggested institutional accumulation rather than retail FOMO.

The confluence factor that sealed my decision was Bitcoin's simultaneous breakout. When I saw BTC breaking higher with conviction, it provided the additional confirmation I needed to trust the break and retest setup.

The trade played out exactly as anticipated, with price running toward the trend line and ultimately reaching the 4-hour supply zone where the session concluded.

What Worked

The systematic approach to reading price behavior at key levels proved effective. Instead of guessing the direction, I waited for the market to show its hand through actual price action and volume characteristics.

Using Bitcoin as confluence was particularly valuable. In today's interconnected crypto markets, having multiple assets confirm the same directional bias significantly increases the probability of success. The correlation played out perfectly as both assets moved higher in tandem.

The target selection was also solid. Identifying the trend line and 4-hour supply zone ahead of time gave me clear levels to expect resistance and potential profit-taking opportunities.

What Didn't

The execution was relatively clean on this trade, but there are always areas for improvement. I could have been more specific about my risk parameters and documented exact entry and exit prices for better trade review.

The confluence reading was good, but I should consider expanding my correlation analysis beyond just Bitcoin. Other risk assets or traditional markets might provide additional confirmation signals.

Lessons Learned

This trade reinforced several important principles:

Wait for confirmation at key levels - Rather than anticipating the direction at previous week's highs, letting the market reveal its intention through price behavior led to a higher-probability entry.

Use multiple timeframe analysis - The combination of the break and retest pattern with the 4-hour supply zone target showed how different timeframes can work together to create a complete trading picture.

Correlation matters - Bitcoin's breakout provided crucial confluence that strengthened my conviction in the trade. In crypto markets, ignoring BTC's direction is often a costly mistake.

Respect technical levels - The market's reaction at the trend line and supply zone demonstrated why pre-identifying key levels is essential for managing expectations and exits.

For future trades, I'll continue focusing on this patient, confirmation-based approach rather than trying to predict market direction. The market will always tell you what it wants to do if you know how to listen to the price action.