OPEN-SOURCE SCRIPT
Updated Breakout & Retest Entry Signals & the Break-vs-Retest
OVERVIEW
"Wait for the retest" is the most repeated piece of advice in breakout trading. It is also, as far as I can tell, completely untested by the people who repeat it.
This tool settles it — on your instrument, with your settings — by taking BOTH entries on the SAME breaks and grading them against the same control:
PER-TRADE EDGE expectancy vs control · n
Break entry +0.09R +0.02R · n=412
Retest — CLEAN +0.31R +0.02R · n=118
Retest — DEEP -0.04R +0.02R · n=76
clean vs deep (t) 3.41 CLEAN IS BETTER
BUT — HOW OFTEN DO YOU GET IT?
Breaks that ever retested 47.0% (194/412)
after a run of >3 closes 31.2% vs 55.8% otherwise
False-break rate 13.3%
EXPECTED VALUE PER BREAK
Take every break +0.09R (100% of breaks)
Wait for the retest +0.06R (47% of breaks)
VERDICT NO DIFFERENCE — pick either
That last block is the entire point. A better per-trade edge is worthless if you only get the trade half the time — so the WAIT policy is scored as P(retest) x E[R | retest], because on every break that never retests you get NOTHING. The two are then compared with a significance test, and the verdict is allowed to be "no difference".
It is a research and framing tool. NOT a strategy, NOT a signal service, NOT a validated edge.
WHAT IT ALREADY FOUND — measured live on NIFTY futures
timeframe breaks retested false breaks verdict
1m 334 49.4% 29.6% NO DIFFERENCE
3m 323 53.3% 13.6% NO DIFFERENCE
5m 328 53.4% 14.0% NO DIFFERENCE
15m 306 51.0% 12.7% TAKE THE BREAK
1h 274 50.0% 16.4% NO DIFFERENCE
TWO THINGS JUMP OUT.
The retest rate is 50-53% on every timeframe. Bulkowski, measuring throwbacks across 10,348 chart patterns on US daily stocks, found 50-60%. A completely different market, a completely different method, and the same number. That is a real phenomenon, not an artefact of the detector.
The false-break rate is 26.5% on the 1m and 13-15% everywhere else. THE ONE-MINUTE BREAK IS TWICE AS LIKELY TO BE A LIE. That is not folklore, it is this instrument's own number, and it is exactly the kind of thing a trader should know before choosing a timeframe.
And the verdict, on four of the five: NO DIFFERENCE — pick either. Once the geometry is honest and the test is a real one, the great break-versus-retest argument simply does not resolve on this instrument at most speeds. On the 15m it does resolve — and it says TAKE THE BREAK, which is the opposite of what almost everyone will tell you.
That is what a measurement looks like. It disagrees with the folklore on one timeframe, refuses to take a side on four others, and does not care what you were hoping for. No tool that needs to sell you a signal would ever print "NO DIFFERENCE".
THE ONE THING EVERYONE GETS BACKWARDS
Thomas Bulkowski measured throwbacks and pullbacks across 10,348 chart patterns. His finding:
"Do throwbacks hurt performance? YES: 97% of the time chart patterns with upward breakouts
perform better post-breakout WITHOUT a throwback."
"Do pullbacks hurt performance? YES: 91% of chart pattern types with downward breakouts
perform better if a pullback does NOT occur."
Read that again. The retest is not a gift. It is a SYMPTOM — evidence that the move is weak, that supply came back, that the break did not have the strength to run.
And yet "wait for the retest" is good advice for a completely different reason: it gives you a better price and a tighter stop.
BOTH ARE TRUE AT ONCE. They are two opposing effects on the same trade, and they have never been put on one scale and netted out. That is what this script does. The retest may still win — a better entry can outweigh a weaker move — but nobody has ever checked, and the answer is different on every instrument and every timeframe.
A CLEAN RETEST AND A DEEP ONE ARE NOT THE SAME EVENT
Bulkowski again, and this is his sharpest single finding on the subject: during a throwback, if price REMAINS ABOVE the breakout price the subsequent rise averages 40%. If it drops BELOW the breakout price and then recovers, the rise averages 29%. That is 400 samples versus 2,767.
Pooling those two throws away the strongest signal in the whole idea. So they are separated:
CLEAN retest — price came back and touched the level, but never CLOSED back through it.
DEEP retest — price CLOSED back through the level, then recovered.
They are graded separately, tested against each other, and labelled separately on the chart. If clean beats deep on your instrument, then "wait for the retest" is not one rule — it is two, and only one of them works.
AND CAN YOU SEE IT COMING?
The real, unpriced cost of a WAIT policy is that roughly half the time you never get filled. So it matters enormously whether you can predict which breaks will retest.
Bulkowski found that if price has more than three consecutively higher closes ending the day before the breakout, the throwback probability drops materially. So the panel reports the retest rate SPLIT BY THAT:
after a run of >3 closes 31.2% vs 55.8% otherwise
If the split is real on your instrument, then after a strong run into the break you should simply TAKE IT — because the retest you are waiting for is probably never coming.
IS YOUR VOLUME FILTER EARNING ITS KEEP?
Every trader is taught that a breakout must be confirmed by volume. Bulkowski's volume study says that after an ABOVE-average-volume breakout, FAILURES DOUBLE and the likelihood of a throwback TRIPLES, while the move itself is barely better.
That is testable — but only if the low-volume breaks are allowed into the sample. So VOLUME IS NOT A GATE ON THE RECORD. Every break is recorded; volume gates only the SIGNAL. The panel then reports what your filter is actually worth:
Break ON volume +0.11R n=246
Break OFF volume +0.06R n=166
on vs off (t) 0.82 no difference — it is doing nothing
The record is a fact about the market. The filter is a decision about the trade. They are kept apart, and this is what happens when you stop assuming and start measuring.
IDENTICAL GEOMETRY — and why this is not a detail
The target used to be THE NEXT OPPOSING LEVEL. That quietly destroyed the entire experiment.
The BREAK entry sits PAST the level (it closed through it). The RETEST entry sits BACK AT the level. So the retest is systematically FARTHER from the next opposing level, and was therefore being handed a BIGGER R:R for the SAME RISK — on every single trade, by construction. Live, that produced an R:R of 5.0 on one timeframe and 0.66 on another, and the on-chart key was cheerfully claiming "identical geometry" while the geometry was tilted toward the retest.
The trade now uses a FIXED R multiple, identical for the break, the retest and the control. The next opposing level is still drawn, and still tested — separately, as a descriptive statistic, with its hit rate reported next to its distance in R.
THE ANTI-BIAS GUARDS
ENTRY IS THE CLOSE, for both entries and for the control. Entering the retest AT the level — a better price than the close — while the break enters at its close would hand the retest a free head start on every trade, and settle the oldest argument in trading by rigging it.
THE CONTROL IS DIRECTION-MATCHED. Breaks run with the trend, so a direction-skewed event set measured against a symmetric 50/50 control inherits the drift for free and calls it an edge. Longs are compared only with control longs, shorts only with control shorts, and the control is blended back using the events' OWN direction mix.
EVERY VERDICT IS A TEST, NOT A COMPARISON. Break-vs-wait, clean-vs-deep, volume-on-vs-off — each is a Welch t-test that has to clear |t| > 1.96 before it is allowed to be a finding. For the wait policy, the variance of P(retest) x E[R|retest] is propagated by the delta method, because it is a product of two estimates and both carry error. A verdict that flips on a tenth of an R is not a verdict, it is noise wearing a costume.
Both barriers on one bar: the STOP is assumed first — conservative, and the only assumption that cannot flatter the result. Unresolved trades at the horizon are marked to market, not booked as losses.
THE LEVELS
Levels come from the extrema of a KERNEL-SMOOTHED price series (Nadaraya-Watson) rather than raw pivots, so they track the structure rather than the noise. A break requires a CLOSE beyond the level with displacement, not a wick. A false break is one that closes back inside quickly. All of it is computed on confirmed bars; the kernel is causal and never looks forward.
NON-REPAINT
The kernel confirms an extremum a half-window late, so a level appears some bars AFTER the swing that created it. That lag is the price of not repainting and it is paid deliberately. Levels, breaks, false breaks, retests, signals and every calibration event are computed on CONFIRMED bars only. Nothing is drawn and then moved.
DATA AND SCOPE
Any symbol, any timeframe. ATR-normalised throughout. Volume improves the SIGNAL but is not required, and it never gates the RECORD.
EXPORTS (Data Window — consume from other scripts via input.source())
EXP_Level, EXP_Break, EXP_FalseBreak, EXP_Retest, EXP_Entry, EXP_Stop, EXP_Target, EXP_NextLevel, EXP_WaitEdge
CONCEPT CREDIT
Support/resistance, polarity and the breakout-retest idea are long-standing public trading concepts with no single author; the written tradition runs through Charles Dow, Richard Wyckoff and Edwards & Magee. The formal TRADING-RANGE BREAK was first tested at scale by William Brock, Josef Lakonishok and Blake LeBaron, Journal of Finance 47(5), 1992 — and their results were later shown to be vulnerable to data-snooping (Sullivan, Timmermann and White, 1999), which is exactly why this tool measures the rule on YOUR instrument rather than asserting it.
The throwback and pullback statistics that motivate the clean/deep split, the run-length predictor and the volume test are from Thomas Bulkowski ("Encyclopedia of Chart Patterns"; thepatternsite.com). His numbers are measured on US daily stocks. Whether they hold on YOUR instrument is precisely the question this script exists to answer — and it may well answer "no".
Nadaraya-Watson kernel regression — Nadaraya and Watson (1964); its use for technical pattern recognition — Lo, Mamaysky and Wang, Journal of Finance 55(4), 2000. Triple-barrier forward labelling — Marcos Lopez de Prado. Welch's t-test — B. L. Welch. ATR — J. Welles Wilder.
The break-vs-wait availability weighting, the delta-method significance test, the clean/deep retest split, the volume-filter test and the direction-matched control are the author's own. Clean-room implementation; no third-party Pine code is reused. Not affiliated with, nor endorsed by, any of the above.
HONESTY AND LIMITATIONS
Calibration is IN-SAMPLE, with no costs or slippage, and uses overlapping windows. A proven in-sample edge is NOT a guarantee out-of-sample. Real fills, spreads and commissions will reduce it — and they will hurt the break entry more than the retest entry, because the break enters into momentum.
Bulkowski's throwback statistics are measured on US daily stocks over decades. They are the reason the questions are asked. They are NOT the answer, and this tool will tell you so if your instrument disagrees.
The verdict is allowed to be "NO DIFFERENCE — pick either", and on many instruments it will be. That is a real result. A tool that cannot report its own failure is an advertisement, not a measurement.
Nothing in this script predicts price.
DISCLAIMER
Research and educational tool only. NOT financial advice, NOT a recommendation, and NO guarantee of results. Entry, stop and target output is arithmetic, not advice. Trading carries risk of loss. Test out-of-sample and make your own decisions. The author accepts no liability for any use.
"Wait for the retest" is the most repeated piece of advice in breakout trading. It is also, as far as I can tell, completely untested by the people who repeat it.
This tool settles it — on your instrument, with your settings — by taking BOTH entries on the SAME breaks and grading them against the same control:
PER-TRADE EDGE expectancy vs control · n
Break entry +0.09R +0.02R · n=412
Retest — CLEAN +0.31R +0.02R · n=118
Retest — DEEP -0.04R +0.02R · n=76
clean vs deep (t) 3.41 CLEAN IS BETTER
BUT — HOW OFTEN DO YOU GET IT?
Breaks that ever retested 47.0% (194/412)
after a run of >3 closes 31.2% vs 55.8% otherwise
False-break rate 13.3%
EXPECTED VALUE PER BREAK
Take every break +0.09R (100% of breaks)
Wait for the retest +0.06R (47% of breaks)
VERDICT NO DIFFERENCE — pick either
That last block is the entire point. A better per-trade edge is worthless if you only get the trade half the time — so the WAIT policy is scored as P(retest) x E[R | retest], because on every break that never retests you get NOTHING. The two are then compared with a significance test, and the verdict is allowed to be "no difference".
It is a research and framing tool. NOT a strategy, NOT a signal service, NOT a validated edge.
WHAT IT ALREADY FOUND — measured live on NIFTY futures
timeframe breaks retested false breaks verdict
1m 334 49.4% 29.6% NO DIFFERENCE
3m 323 53.3% 13.6% NO DIFFERENCE
5m 328 53.4% 14.0% NO DIFFERENCE
15m 306 51.0% 12.7% TAKE THE BREAK
1h 274 50.0% 16.4% NO DIFFERENCE
TWO THINGS JUMP OUT.
The retest rate is 50-53% on every timeframe. Bulkowski, measuring throwbacks across 10,348 chart patterns on US daily stocks, found 50-60%. A completely different market, a completely different method, and the same number. That is a real phenomenon, not an artefact of the detector.
The false-break rate is 26.5% on the 1m and 13-15% everywhere else. THE ONE-MINUTE BREAK IS TWICE AS LIKELY TO BE A LIE. That is not folklore, it is this instrument's own number, and it is exactly the kind of thing a trader should know before choosing a timeframe.
And the verdict, on four of the five: NO DIFFERENCE — pick either. Once the geometry is honest and the test is a real one, the great break-versus-retest argument simply does not resolve on this instrument at most speeds. On the 15m it does resolve — and it says TAKE THE BREAK, which is the opposite of what almost everyone will tell you.
That is what a measurement looks like. It disagrees with the folklore on one timeframe, refuses to take a side on four others, and does not care what you were hoping for. No tool that needs to sell you a signal would ever print "NO DIFFERENCE".
THE ONE THING EVERYONE GETS BACKWARDS
Thomas Bulkowski measured throwbacks and pullbacks across 10,348 chart patterns. His finding:
"Do throwbacks hurt performance? YES: 97% of the time chart patterns with upward breakouts
perform better post-breakout WITHOUT a throwback."
"Do pullbacks hurt performance? YES: 91% of chart pattern types with downward breakouts
perform better if a pullback does NOT occur."
Read that again. The retest is not a gift. It is a SYMPTOM — evidence that the move is weak, that supply came back, that the break did not have the strength to run.
And yet "wait for the retest" is good advice for a completely different reason: it gives you a better price and a tighter stop.
BOTH ARE TRUE AT ONCE. They are two opposing effects on the same trade, and they have never been put on one scale and netted out. That is what this script does. The retest may still win — a better entry can outweigh a weaker move — but nobody has ever checked, and the answer is different on every instrument and every timeframe.
A CLEAN RETEST AND A DEEP ONE ARE NOT THE SAME EVENT
Bulkowski again, and this is his sharpest single finding on the subject: during a throwback, if price REMAINS ABOVE the breakout price the subsequent rise averages 40%. If it drops BELOW the breakout price and then recovers, the rise averages 29%. That is 400 samples versus 2,767.
Pooling those two throws away the strongest signal in the whole idea. So they are separated:
CLEAN retest — price came back and touched the level, but never CLOSED back through it.
DEEP retest — price CLOSED back through the level, then recovered.
They are graded separately, tested against each other, and labelled separately on the chart. If clean beats deep on your instrument, then "wait for the retest" is not one rule — it is two, and only one of them works.
AND CAN YOU SEE IT COMING?
The real, unpriced cost of a WAIT policy is that roughly half the time you never get filled. So it matters enormously whether you can predict which breaks will retest.
Bulkowski found that if price has more than three consecutively higher closes ending the day before the breakout, the throwback probability drops materially. So the panel reports the retest rate SPLIT BY THAT:
after a run of >3 closes 31.2% vs 55.8% otherwise
If the split is real on your instrument, then after a strong run into the break you should simply TAKE IT — because the retest you are waiting for is probably never coming.
IS YOUR VOLUME FILTER EARNING ITS KEEP?
Every trader is taught that a breakout must be confirmed by volume. Bulkowski's volume study says that after an ABOVE-average-volume breakout, FAILURES DOUBLE and the likelihood of a throwback TRIPLES, while the move itself is barely better.
That is testable — but only if the low-volume breaks are allowed into the sample. So VOLUME IS NOT A GATE ON THE RECORD. Every break is recorded; volume gates only the SIGNAL. The panel then reports what your filter is actually worth:
Break ON volume +0.11R n=246
Break OFF volume +0.06R n=166
on vs off (t) 0.82 no difference — it is doing nothing
The record is a fact about the market. The filter is a decision about the trade. They are kept apart, and this is what happens when you stop assuming and start measuring.
IDENTICAL GEOMETRY — and why this is not a detail
The target used to be THE NEXT OPPOSING LEVEL. That quietly destroyed the entire experiment.
The BREAK entry sits PAST the level (it closed through it). The RETEST entry sits BACK AT the level. So the retest is systematically FARTHER from the next opposing level, and was therefore being handed a BIGGER R:R for the SAME RISK — on every single trade, by construction. Live, that produced an R:R of 5.0 on one timeframe and 0.66 on another, and the on-chart key was cheerfully claiming "identical geometry" while the geometry was tilted toward the retest.
The trade now uses a FIXED R multiple, identical for the break, the retest and the control. The next opposing level is still drawn, and still tested — separately, as a descriptive statistic, with its hit rate reported next to its distance in R.
THE ANTI-BIAS GUARDS
ENTRY IS THE CLOSE, for both entries and for the control. Entering the retest AT the level — a better price than the close — while the break enters at its close would hand the retest a free head start on every trade, and settle the oldest argument in trading by rigging it.
THE CONTROL IS DIRECTION-MATCHED. Breaks run with the trend, so a direction-skewed event set measured against a symmetric 50/50 control inherits the drift for free and calls it an edge. Longs are compared only with control longs, shorts only with control shorts, and the control is blended back using the events' OWN direction mix.
EVERY VERDICT IS A TEST, NOT A COMPARISON. Break-vs-wait, clean-vs-deep, volume-on-vs-off — each is a Welch t-test that has to clear |t| > 1.96 before it is allowed to be a finding. For the wait policy, the variance of P(retest) x E[R|retest] is propagated by the delta method, because it is a product of two estimates and both carry error. A verdict that flips on a tenth of an R is not a verdict, it is noise wearing a costume.
Both barriers on one bar: the STOP is assumed first — conservative, and the only assumption that cannot flatter the result. Unresolved trades at the horizon are marked to market, not booked as losses.
THE LEVELS
Levels come from the extrema of a KERNEL-SMOOTHED price series (Nadaraya-Watson) rather than raw pivots, so they track the structure rather than the noise. A break requires a CLOSE beyond the level with displacement, not a wick. A false break is one that closes back inside quickly. All of it is computed on confirmed bars; the kernel is causal and never looks forward.
NON-REPAINT
The kernel confirms an extremum a half-window late, so a level appears some bars AFTER the swing that created it. That lag is the price of not repainting and it is paid deliberately. Levels, breaks, false breaks, retests, signals and every calibration event are computed on CONFIRMED bars only. Nothing is drawn and then moved.
DATA AND SCOPE
Any symbol, any timeframe. ATR-normalised throughout. Volume improves the SIGNAL but is not required, and it never gates the RECORD.
EXPORTS (Data Window — consume from other scripts via input.source())
EXP_Level, EXP_Break, EXP_FalseBreak, EXP_Retest, EXP_Entry, EXP_Stop, EXP_Target, EXP_NextLevel, EXP_WaitEdge
CONCEPT CREDIT
Support/resistance, polarity and the breakout-retest idea are long-standing public trading concepts with no single author; the written tradition runs through Charles Dow, Richard Wyckoff and Edwards & Magee. The formal TRADING-RANGE BREAK was first tested at scale by William Brock, Josef Lakonishok and Blake LeBaron, Journal of Finance 47(5), 1992 — and their results were later shown to be vulnerable to data-snooping (Sullivan, Timmermann and White, 1999), which is exactly why this tool measures the rule on YOUR instrument rather than asserting it.
The throwback and pullback statistics that motivate the clean/deep split, the run-length predictor and the volume test are from Thomas Bulkowski ("Encyclopedia of Chart Patterns"; thepatternsite.com). His numbers are measured on US daily stocks. Whether they hold on YOUR instrument is precisely the question this script exists to answer — and it may well answer "no".
Nadaraya-Watson kernel regression — Nadaraya and Watson (1964); its use for technical pattern recognition — Lo, Mamaysky and Wang, Journal of Finance 55(4), 2000. Triple-barrier forward labelling — Marcos Lopez de Prado. Welch's t-test — B. L. Welch. ATR — J. Welles Wilder.
The break-vs-wait availability weighting, the delta-method significance test, the clean/deep retest split, the volume-filter test and the direction-matched control are the author's own. Clean-room implementation; no third-party Pine code is reused. Not affiliated with, nor endorsed by, any of the above.
HONESTY AND LIMITATIONS
Calibration is IN-SAMPLE, with no costs or slippage, and uses overlapping windows. A proven in-sample edge is NOT a guarantee out-of-sample. Real fills, spreads and commissions will reduce it — and they will hurt the break entry more than the retest entry, because the break enters into momentum.
Bulkowski's throwback statistics are measured on US daily stocks over decades. They are the reason the questions are asked. They are NOT the answer, and this tool will tell you so if your instrument disagrees.
The verdict is allowed to be "NO DIFFERENCE — pick either", and on many instruments it will be. That is a real result. A tool that cannot report its own failure is an advertisement, not a measurement.
Nothing in this script predicts price.
DISCLAIMER
Research and educational tool only. NOT financial advice, NOT a recommendation, and NO guarantee of results. Entry, stop and target output is arithmetic, not advice. Trading carries risk of loss. Test out-of-sample and make your own decisions. The author accepts no liability for any use.
Release Notes
v1.1 — Maintenance / correctness updateThe internal RVOL average and the raw-pivot level detection now recalculate on every bar, which is what Pine requires for series functions (sma, pivothigh, pivotlow). On any instrument that reports volume from the first bar there is NO change to signals, levels, statistics or Data Window outputs — the v1.0 numbers are unchanged. The fix removes a latent buffer inconsistency that could have surfaced on symbols with a zero-volume warm-up, and clears the Pine compiler warning. No inputs, alerts, or EXP_ outputs changed. Calibration remains gross of costs, as stated in the script's honesty section.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.