One of most frequent questions I receive is, should I wait for the retest of a broken level or enter immediately following the breakout? In other words, if a currency pair breaks out from a head and shoulders pattern, should you wait for a retest of the neckline as new resistance or simply enter once the day closes below the level?

While the aneswer is fairly subjective, there are a few “golden rules” that can help you decide whether to enter on the breakout or wait for a possible retest. Today’s lesson will cover three simple rules that should always be factored into your decision-making process.

But before we begin I want to be clear that this style of trading (entering without price action confirmation), is a bit more advanced than waiting for a pin bar to form after the market breaks a key level. So if you are new to price action, I recommend that you start with the lesson on pin bar and really perfect that strategy before you consider using the two entry methods in this lesson.