what is going on everybody and welcome back to another video so in today's video I'm going to be giving you guys one of my bread and butter setups that I've been using over the last 7 years of my trading career which is going to be the break and retest now if you're a scaler and a day trader the break and retest is probably going to end up being one of the favorite setups inside of your playbook and I typically find myself using this setup quite often and it is a very profitable and very consistent setup for me what I'm going to be doing for you guys today is giving you guys the found ation of the break and retest that way you can modify and import it into your playbook as much as you'd like and as much as you please so for me I currently use this setup on Futures on indices and on Commodities as well I used to also trade this setup when I also traded crypto and Forex but mainly I use it nowadays on Futures indices and commodities so I mainly looked for setups when it comes to the break and retest based off of the 5 the 3 minute and the 15minute time frame but you could trade a break and retest setup off of key levels that are formed on the hour the 30 minute time frame as well I haven't traded the break and retest setup too much on the 4H hour and the daily time frame as I'm not really a swing Trader but definitely you can also look for break and retest setup opportunities based off of those higher time frame key levels so without further Ado let's get right into the video so with the example that I'm going to be using today giving you guys the break and Retail setup and how you guys could look for this setup on a day-to-day basis really just comes down to intraday price action so today I'm going to be giving you guys example on NQ so the first thing that I actually want to cover before we get into the rest of this video and cover the setup itself is that you still need to be able to perform your top down analysis you still need to be able to identify what trend the market is overall in as we do want to follow the trend as much as we possibly can although we can use a break and retest setup on counter Trend which is the example that we're going to be going over in today's video and what I highly recommend you guys do as well is also combine the break and retest setup with order flow using the order book or the heat map verifying areas of resting liquidity and looking for those break and retest setups off of those areas of previous resting liquidity or looking for absorption at your key levels on the footprint charts with the break and retest setup so nowadays what I'm doing a lot of is using order flow with the break and Retail setup and I'm finding it to be very very profitable but for those of you guys that are more beginners I'm just going to give you guys the foundation of the break and retest setup so in that way you guys grab the foundation modify it to your liking and make sure that the results are positive before actually implementing it into your trading Playbook and actually trading this on a day to-day basis to find the greatest trading opportunities so after you come onto the markets and you identified what trendy Market is currently in and what your daily bias is overall what we're going to be doing and establishing is the overall intraday range so this is NQ today we have NQ in the premarket where we had CPI actually push price all the way up into roughly the 2,098 almost the 21,000 which is absolutely crazy to think that NQ pumped that much this morning then we have NQ pump all the way down so what I'm going to be doing and identifying is the areas that price action gave us the most support and resistance and looking for that overall range so if we look at this and we grab this overall in a median it's very clear to us that we have the highs of the resistance range being right here roughly at the 20913 so this is going to be the high of the range just simply because of the selling pressure that we saw and the pullback and the sell off that we saw once price action pushed up into this key level this is going to be our 5minute key level of the highs of the range and then we're also going to enter off the price which is going to be 2913 50 I'm going to Simply lock that in there so when we do go down to a lower time frame and we do have multiple key levels marked off we know that this is going to be a 5 minute key level a 5 minute high as well then we can come in and mark off this area over here which I'm going to mark it off here just simply because we had the rejection from the pr Market which is something I'm going to favor we also have this rejections that we see over here in this indecision so this is going to be the lows of the range over here and we're going to follow the same process 5 minute key level this price point is going to be 20 868 50 now once our highs and lows our key levels are actually marked off the other thing that we're also going to want to pay attention to is the vwap when we take a break and retest setup we want to make sure we're trading in the direction of the vwap which essentially what the vwap is and the way you can interpret the vwap is is simply a volume weighted average price indicator so when price action is trading under the vwap typically there's going to be more bearish volume when price action is trading above the vop typically there's going to be more bullish volume so in the situation where we're looking for a break and retest of the key level at 28685 we're going to be wanting to see that price action is trading under this vwap and when price action is above if we're look for a break and retest here at the 20.9 13s 25s we're going to be looking for Price action be trading above the vwap now all this a breaking retest simply is is if price action has an area of support and price action is consolidating what we want to see is a break of that previous area of support we want to see price action form a new low giving us a confirmation on the trend and then for Price action to pull back up into this area we want to see sellers actually hold our previous area of support where we saw price action bouncing off of the lows of the range and we want to see signs of rejections and we want to see that there is selling pressure in this area and that there is new aggressive selling coming in this area which will cause the price to actually go down and that sellers do actually hold this area if we were to actually look and interpret this overall range if we see price action is ranging here we want to establish that we're going to be trading in the right direction what we want to see is a form of a break to the upside once price action does break to the upside we will look for that pullback we're not going to be taking a trade at the breakout we want to see that pull back into the previous area of resistance and then we're going to be looking for this nice bounce off of the this area of previous resistance which we're going to be looking for it to hold as support and we want to see buyer step back in and push the price higher now this is why I say if you guys use a break and retest setup with orderflow you're going to have even that much of an edge because you're going to Simply Be able to identify if buyers are going to be holding that area if there is new buying pressure If there is new aggressive buying stepping in or maybe if the selling positions are actually getting absorbed then you actually can look for that continuation and push higher before actually getting the price action confirmation because a lot of the times you'll be able to actually get into the trade before the trade even happens and being able to actually get a lot better of an or multiple so on the situation with NQ originally we saw NQ try and break out to the downside which again I'm going to be looking at the 3 minute time frame here you see NQ try and break out to the downside and for those of you guys that were taking breakout setups and breakout cells here you would have most likely have gotten stopped out on this position that's exactly what a break and retest avoids is avoids these types of fake outs so the first thing that we want to establish is that we do see price action push all the way down and we do see candle closes start happening under the area of support so in the situation where we're looking for a break and retest to the downside this is going to be the key level that we're going to be looking to take this break and retest from I want to see at least two candlesticks close under this area of support after we see the two Candlestick close I want to see a pull back into this area and I want to see continue push down now you could be looking at the 3-minute time frame here you could also be looking at the 1 minute time frame here as well to be getting as as much information and details as possible when it comes to this break and retest so originally you can actually see price action push all the way up into this previous key level being the 5-minute key level but just keep in mind the lower the time frame you actually go down to the more the data you're actually going to receive and the more noise you're also going to get out the markets which is why I like the 3 minute time frame because it is a nice median so when price action actually did push all the way up into this area of previous res of previous support what we want to establish is that this area is holding as resistance so notice on this Candlestick price action did actually come into this area and start to reject this area and start to go back down this was a very weak close and this is only where orderflow is going to be able to help you out in these types of situations to be able to get the best trading opportunities possible now in situations where you're only going to be looking at Price action and you're only going to be paying attention to the actual candlesticks themselves in situations where you want to wait for a more conservative entry what I would recommend you guys look into is a conservative entry method that I like to use called the break of the previous lowest slow so the situation where price action did push up into this previous High what I want to see is a break of the previous Candlestick low so now that this Candlestick had to close this bullish Candlestick that tested that area of previous support now folding as resistance because of this bearish Candlestick here we do see price action actually start to come back down and then it pulled back up next Candlestick opened up we see price action form a little bit of a wick tested this area again and price action started to come all the way back down here again as well so right as price action started to take out the low of the previous Candlestick this is where you could have definitely entered the markets here now again if you would have been looking at maybe a 1 minute time frame you could have gotten a lot better of an entry but just keep in mind you're going to see a lot more noise in this area you could have potentially entered base off of and I'm again I'm using the one minute as an example here you could have entered this trade based off of the retest and the rejection that you see off this engulfing Candlestick here now there's going to be no entries along this area because we're looking for an engulfing Candlestick pattern so again guys to be reiterated what we're going to be looking for is one we're going to establish that price action in this situation since we're looking to sell price is under the vwap which in this situation it is two we want price action to break support which we want to be looking for two candle closes under and then three we want to wait for price to pull back and retest that previous area of support retest SL reject support these are my three m main price action confirmations this is without order flow and I I want to reiterate that again to you guys is because I do use order flow and I will only trade these setups with orderflow nowadays especially because it gives me an extra added Edge in the markets using the heat map if we can see if there's rest in liquidity in these areas but again like you guys can go back into the other orderflow videos that I've done on my YouTube channel this video is a little bit more towards the beginners and people who are looking and just starting to get their playbook set up but these are going to be the main three price action signals that I'm going to be looking for when actually taking this setup so one we do have price action trading under the vwap so we could check that off two we have the two candle close under the previous area of support so we can check that off and then three we do have the retest and then we have the rejection of this area of previous resistance so we could check that off and we can start to look for entries on this setup now you could look for entries on the 1 minute the 3 minute the 5 minute time frame as well if you're going to be trading based off a 5minute key level I wouldn't recommend then you look at the 15-minute time frame for a break and retest because what could happen is you're going to miss out on you could miss out on huge moves like this if you're going to be trading an hour time frame then that's when you could use the 15 minute or the 30 minute time frame for to look for these break and retests and what I mean by that is if you're going to be trading on an hour time frame key level that's the time frame that you could look for entries on the 15minute and the 30 minute based off of that hour key level but since we're trading a 5-minute key level I mainly want to look at the 5 minute the 3 minute and the 1 minute time frame when it comes to this area now in terms of the entries again everybody's going to have different entry techniques different entry methods for me I like to look for some form of absorption some form of an imbalance on the footprint charts but again an oldie but a Goldie is always looking for an engulfing Candlestick pattern so in a situation like this you could have looked to enter the base off of the close on this one minute time frame which this is why I got into orderflow because typically when you enter an engulfing like this you're going to see that you're going to have a lot bigger of a stop- loss just because simply price actions already moved in your favor when using order flow you actually are able to get in a lot sooner before price action has even pushed in that specific Direction now when it comes to take profits what we're going to be doing is looking at taking profit at the next level of structure that you do see here which is going to be to the left so if you're in a situation where you do take a break and retest setup at alltime highs in price action there's nothing you can go based off of historical data then in the situation where let's say you took a break and retest I don't know let's call it here right all you're simply going to do is say your stop loss like you normally would a above the previous uh resistance range when you're taking sells in this situation we're going to place our stop loss above the previous resistance range where we took the shorts along with above the high that price action made before it started going back down before your entry in the situation where you're longing then you want to place your stop loss under support under the low of the retest rejection so if you see price action broke above pulled back down into here and then gave you that break and retest you want to place your stop loss under that low all you're simply going to do is Target a 1 to one and a half to a 2 to1 R multiple and then show your stops for there to try and squeeze out as much R multiple as possible but in the situation where you do have previous structure then all you're simply going to do is Target your previous area of Market structure and as you could see in this specific trade example with this entry type it gave you a 3r multiple now again for those of you guys that do incorporate this setup into your playbook I highly recommend you guys start getting into orderflow as well because you'll be able to start getting a lot better entries where you're actually able to squeeze out way better on multiple opport OPP unities so that is going to Simply give you guys the quick rundown and the quick breakdown on how you guys can actually trade the break and retest setup this setup is very beginner friendly and this is also a setup that I use on a daily basis to make money off of the markets I've had huge days with this setup and this is also a setup that I constantly use to help me get the $101,000 payout from ftmo so I hope you guys enjoyed this video and for those of you guys that stayed all the way to the end if you guys want one-on-one coaching with me then make sure you click that first link in the description and I will see you guys in the next video