The short answer
Not as an entry signal, on the markets and costs we tested. Across about 13,700 confirmed setups on six markets and three timeframes, entering on a confirmed retest in the trend's direction did no better than entering at a random bar in the same direction, and it lost money after costs (-0.02R to -0.13R a trade, with one good year on H4 out of three). It also failed before costs, so cheaper trading would not rescue it. A second test of multi-week range breaks found the retest continued 38% of the time at real levels and 37% at fake ones.
What we tested
- Markets
- XAUUSD (gold), EURUSD, GBPUSD, USDJPY, US500, US100
- Period
- Year 1 and year 2 (M15, H1); H4 also from 2021
- A bar closes beyond a level in the direction of the higher-timeframe trend, price comes back to the broken level, and a bar closes away from it again.
- Entry at market after that confirming close, stop beyond the retest's extreme, target 2R.
- Funnel on M15 alone: 21,300 breaks, 13,336 retested, 9,586 confirmed. Setups are common on every timeframe.
Results
| Timeframe | Period | Trades | After costs | Random entry with the trend | Before costs |
|---|---|---|---|---|---|
| M15 | Year 1 | 2,710 | -0.097R | -0.064R | -0.015R |
| M15 | Year 2 | 2,852 | -0.096R | -0.086R | -0.017R |
| H1 | Year 1 | 689 | -0.024R | -0.041R | +0.021R |
| H1 | Year 2 | 740 | -0.126R | -0.015R | -0.076R |
| H4 | 2021-24 | 814 | -0.059R | - | - |
| H4 | Year 1 | 213 | +0.152R | +0.033R | +0.215R |
| H4 | Year 2 | 214 | -0.039R | -0.010R | -0.015R |
H4 2021-24 is the rerun after a data-hygiene fix (see the overfitting study); its controls were not rerun.
| Boxes | Breaks that returned to the edge | Then reached the measured move first |
|---|---|---|
| Real ranges (11 markets, 2021-26) | 401 | 38% |
| Fake ranges of the same size, shifted half a height | - | 37% |
With the stop at the far side of the range and the target one range-height beyond the edge, 38% at 1:1 loses money before costs.
What it means
- The confirmed retest adds nothing over a random entry in the same direction: the direction is about a coin flip, and costs decide the result.
- H4 had one strong year (+0.15R) out of three; the other two were negative. One good year is what chance produces.
- Pullbacks that bounce right at the broken level do continue more often (87% of real breaks), but fake levels show the same (85%). You only know a pullback was shallow after price has left, so it cannot be traded in real time.
- Changing the retest zone's width (up to 25% of the range) or the target method did not change the picture.
Limits of this test
- Six (and eleven) liquid markets on one broker's prices and costs; other markets or cheaper costs were not tested.
- One precise definition of break, retest and confirmation. A trader's discretion may differ, but it then has to be tested the same way to be trusted.
Frequently asked questions
Is break and retest a profitable strategy?
In our tests on gold, EURUSD, GBPUSD, USDJPY, US500 and US100 over two years, no: confirmed retests with the trend lost about 0.02R to 0.13R per trade after costs and were no better than random entries in the trend's direction.
Why does break and retest look so good on charts?
Because the winners are easy to see afterwards. Pullbacks that stopped at the level and continued are memorable, but our test found fake levels produce the same picture; the shallow pullback is only known after the move.
How every test on these pages works
- Prices: the broker's own bars from an FTMO cTrader account. Fills are simulated minute by minute on one-minute bars; when one minute touches both the stop and the target, the stop is assumed to fill first.
- Costs: the broker's bid/ask spread measured by hour of day, commission per market, and the broker's own overnight swap rates for anything held past the daily rollover.
- Periods: year 1 = 24 Oct 2024 to 23 Oct 2025, year 2 = 24 Oct 2025 to 24 Oct 2026. Daily rules also use Dec 2020 to Oct 2024 ("2021-24"). Rules are written down before testing and are not tuned on the period that judges them.
- Controls: every rule is compared with entries that have no reason behind them (random sides, random days, or the same rule at fake levels), so a result has to beat chance, not just be positive.
- R is the trade's risk (entry to stop). An average of +0.10R means the average trade made a tenth of what it risked; -0.10R means it lost a tenth.
The full results for the rules RezSync Algo trades, by market and risk profile with every trade downloadable, are in the backtest report.
Related research
Research, not financial advice. These are simulated results on historical prices: they involve no real money, are produced with hindsight of the rules, and past results do not predict future ones. Costs and fills are modelled, and your broker's prices and costs will differ. Trading leveraged products carries a high risk of losing money; test on a demo account first.