SEC S18-W6 || Mastering the Break Retest Break (BRB) Strategy.

_{Featured image created from my Canava account.}

Cryptocurrency market is a dynamic market wherein any side big movement can be often seen either up side or the down side. In such volatile market trading in Cryptocurrency, it requires some strategies, understanding collecting candlestick movements that provide you insights about the market trend. Implementing such strategies can control losses and maximize returns.

In this blog, we will be checking one of the strategies called Break Retest Break (BRB) and its potentials, and how it can be helpful in trading.

Table of Contents.

1. Explain in detail the concept of the Break Retest Break (BRB) strategy. How can this strategy be applied specifically to trading the Steem token?
2. What are the specific entry criteria for a position using the BRB strategy? Include specific technical indicators and market conditions for the Steem token.
3. Describe the exit criteria for a position based on the BRB strategy. What signals or conditions should be present to close a position in profit or loss?
4. Provide a detailed example of a BRB trade on the Steem token. Include entry points, exit points, and the reasons why you chose these points. Use graphics to illustrate your example.
5. How do you manage risk and capital when using the BRB strategy? Discuss risk management techniques and how to set stops and limits for Steem token trades.

Explain in detail the concept of the Break Retest Break (BRB) strategy. How can this strategy be applied specifically to trading the Steem token?

We have seen the breakout at the Support and the Resistance levels. The Break Retest Break (BRB) strategy is form at these same levels. When breakout occurred either at the Support or the Resistance levels, we predict that the asset price will now continue to the breakout side. However, sometime price move reverse from the breakout wherein the traders get trapped in this price movement for which we also call fakeout.

Let’s see how the Break Retest Break (BRB) strategy form. As per the Market sentiments, when breakout happen at the at the Support or the Resistance levels (Break), the price come back to the same breakout point/level (Retest), from here the price bounce again and cross the level from where it was reverse after breakout (Break).

_{Break Retest Break (BRB).}

Break Retest Break (BRB) Trading Strategy.

Sometime you may not catch all the breakout points at the moment when it occurs and then tried to chase the price. Understand that as mentioned above when breakout occurred, to confirm the breakout the market price come back to the same breakout level to retest it and when you see such movement on price chart, you can place the buy orders. Then as a safe side to book profit, you can place sell order at the level from where it down after breakout as at first it is expected that the price will bounce back to that same level.

Everyone may have different view for placing buy trade, some may prefer to place buy order at the break point means the level from where the price down to the breakout level and up again and cross that break level. However, above and below post explained the information Break Retest Break (BRB) Trading Strategy is the concept I described with chart proof is for safe trade that gives you the best levels/points to place to buy level with minimum stoploss levels to avoid losses and accurate sell levels to take the profit.

Buy Trade: After breakout at the support or resistance level, wait till the price come back to the same breakout level, when it does, place a buy trade.

Sell Trade: After price retest at the breakout level and bounce back, the level from where it was down to retest will be the 1st sell trade. Holders can hold more to see possibility to break that level and get high momentum in price action.

Stop Loss: The previous support or the resistance level can be a stop loss. However, if there is big gap between these, then for safe side and avoid trap in fakeout, you can place stop loss just below your buy level like if your buy point is $0.025 then stop loss can be between $0.021 to $0.023, it depends how the asset is volatile and the price movement shown in the chart.

Considering above image of chart, now the below image of chart will show you when buy and sell order can be placed in Break Retest Break (BRB) Trading Strategy.

_{Break Retest Break (BRB) Trading Strategy.}

• How can this strategy be applied specifically to trading the Steem token?

In Steem token there is quick buying and selling have been seen hence if we look Steem price chart we will most of time see multiple long wicks on most of the candlestick. In order to applied Break Retest Break (BRB) strategy in trading Steem, I will suggest to set 4 hours’ time frame. As per the observation the candlesticks long wicks in 4 hours’ time frame are less than other lowest time frame chart and we can get perfect spots.

To increase Steem Power by investing in Steem, we can specially look breakout at the support level wherein after retest happened it will break the point from where it was bounce back after breakout at support. Here, with low capital you can get extra Steem at a low price. Later you can transfer those Steem on Steemit wallet and increase Steem Power by Power up.

Below is the graphical view of Steem price chart for how Break Retest Break (BRB) strategy can be applied in trading Steem.

Break Retest Break (BRB) strategy in trading Steem, sell/Short sell at break point.

_{Break Retest Break (BRB) Strategy - Sell/Short Sell.}

Break Retest Break (BRB) strategy in trading Steem, Buy at break point

_{Break Retest Break (BRB) Strategy - Buy.}

What are the specific entry criteria for a position using the BRB strategy? Include specific technical indicators and market conditions for the Steem token.

To take a entry trade using Break Retest Break (BRB) strategy, it is important to have specific criteria that creates on the price chart such as candlestick patterns, momentum, market trend. Most important the break point should have to form on a price chart from where it reverses to the breakout point. To take entry position using Break Retest Break (BRB) strategy the criteria are as follows that has to be form on the chart before place the entry trade.

Criteria 1: There has to be clear Support and Resistance to be available for specific duration time wherein the price is bouncing between these levels. Breaking points this level will be 1st break point either Support or the resistance level.

Criteria 2: The price should have to breakout at one of the levels either Support or the Resistance. Breakout to resistance can prepare for the buy trade and Breakout to support can prepare for the short sell.

Criteria 3: After breakout the price should take a pause after some movement and reverse back to the breakout point.

Criteria 4: From where the breakout occurred at the support or resistance level, the reverse price action should have to be till that level.

Criteria 5: The price should have to be close above or at the breakout level. The new candle should have to be open above or at the breakout level. When all above Criteria matches, and new candle open above or at the breakout level, the entry position can be place.

For Steem token, including indicator like Stochastic we can confirm the entry position by considering the market condition. Below is the example of Steem price chart with indicator and the market condition.

_{Break Retest Break (BRB) Strategy with Stochastic Indicator.}

In the above Steem price chart, we have included Stochastic indicator. As we can see, after breakout and during the retest phase the Stochastic indicator has shown the downtrend market condition and it was the Oversold zone. As we know oversold the level from where it is expected to price rise.

Later we can see, when retest form on the price chart, the Stochastic indicator is entering into the 20 level means the support level and indicating the price will be going to rise. Also, the retest has completed at the level of breakout. Here, the entry position is getting confirmed.

Furthermore, we can see at the break point, the Stochastic indicator is moving towards the mid-level 50 means indicating uptrend, showing market condition is bullish which is double confirmation for the entry level in the cryptocurrency Steem.

Describe the exit criteria for a position based on the BRB strategy. What signals or conditions should be present to close a position in profit or loss?

Finding the exit level is quite difficult as when market is in our favor, we often get greediness and hold longer time. It is always had to be strict rule that resistance is the level from where the price move down so knowing the exact resistance level after a buy trade we can estimate what % of profit we will getting and the best level for the exit. Below is the chart example with Buy and Sell trade.

_{Break Retest Break (BRB) Strategy - Exit Position.}

When the price revered after the breakout for a retest, mark that level as a new resistance it could be low points or high points but that should be the 1st level of sell position. So, the criteria are the exit level should be a resistance level.

Apert from this, you also go with the 1:1 or 1:2 profit ratio, this means in 1:1 ratio your stop loss and the target should have at the equal distance like if you buy at $5, the target will be $6 and stop loss will the $4. With this price example in 1:2 ratio, the target will be $7 and stoploss will be the same $4. These position signals you can get from your position trade on crypto exchange.

To book a loss, as mentioned above you can go with the ratio or on a price chart you can place stop loss at the previous support level and for short sell, the stop loss should be the previous resistance.

The above condition should have to present to place the exit trade either at the target side or the stop loss.

Provide a detailed example of a BRB trade on the Steem token. Include entry points, exit points, and the reasons why you chose these points. Use graphics to illustrate your example.

_{Break Retest Break (BRB) Strategy on Steem Price Chart}

In the above price chart of Steem, we will see how Break Retest Break (BRB) strategy can be applied with entry adnd exit point.

Observation: Start from the Left, we can see the resistance level from where the price is reversing and moving to the down. Later, we can see the Steem price has gave breakout to the resistance point and then continue move to the upside. We will wait and have a patience till the price retrace. In retrace the price retest the previous breakout level where it is possible that the previous resistance can become a support level.

Entry Point: When the price come to the breakout level and close above and then next candle is open above it, I will take this as entry point. The reason why I select as entry point is because when breakout occurred at the resistance level and the price come back to the same level but looks unable to cross it and close so it is possible that this resistance can now act as a support and hence, I will consider this as entry point.

First Target: Now my 1st exit point will be the reverse mode point from where the price reverse and came down to the resistance after breakout. The reason I will select this point as exit because if price is down from this level, then it is expected that the price may down again from this level. Hence, as safe trade, this level can be my first exit point.

Second Target: Breaking the previous break point if candle continue in the up side, I will virtually consider this break level as trail stop loss because if market turns back, I will book small profit. However, in continue up from break level, will hold till the next resistance level based on history and that will be my second target. Becasuse resistance is the level from where price can fall so I will exit at this resistanace level.

I will exit on the first target or at the second target if I see the price is fluctuating at this level creating volume. You can see how it is safe to exit as resistance level, at last the sharp downfall occurred. Due to respecting resistance level the trade was safely exited with profit.

Stop Loss: At first buy point, the stoploss will be just below of previous support level. When price continue from the break level, I will move my stoploss forward at the break level.

How do you manage risk and capital when using the BRB strategy? Discuss risk management techniques and how to set stops and limits for Steem token trades.

Considering risk factor is important in all type of markets. While using Break Retest Break (BRB) we need to depend on the breakout and retest phase and the market movements. Sometime it is possible that during the retest, the price action falls again from the same breakout level. Investing entire capital in buy point is risky, so we can first invest some amount of our capital at the first buy signal as per the BRB strategy.

Later if market take the reverse mode due to uncertain movement in the entire market and not specific to the particular asset, and still, you have strong feeling that it will go up then you can place stop loss little back and invest some amount from the remaining capital to average the position. If still market is against you, better to take stop loss and exit with the remaining amount. Wait till the next buy signal to take the entry.

Let’s see if I have $100 as my entire capital, I will not use the entire capital at first buy point instead I will use only $40 from my capital, If the price revered from the breakout and come close to the stoploss level, if I am sure that it will bounce back again, I will set the stop loss little back and use another $20 to average my position. In this way I will not utilize entire capital at one time, because if market goes against my prediction I will lose a lot from my entire capital.

Similar to the above, trading in Steem, the risk management techniques will be the same use part of your capital at the first buy trade. Steem can sometime become highly volatile hence such phases we should avoid to use the entire capital. However, we can average at low level with some more from remaining amount if marked goes opposite.

Trading in Steem, we first have to identified the current support and resistance level and their previous support and resistance level. So that we will be having clear expectation about Steem price movement. Accordingly, we can set stop loss just below the support level when take buy trade and stop loss at previous support when averaging. The limit/target will be the resistance levels or you can go with % change, like if your profit is showing +20% you can limit at this % level and book the profit. 20% may look less, it is depending on how much capital you put and Steem quantity you are trading. However, limit profit by booking 20% or 30% is a good return.

Conclusions.

Break Retest Break (BRB) strategy can be helpful for traders and investors as it gives the best levels for buy and sell trades. However, understanding this strategy require some level of good knowledge of chart pattern, you need to find out clear support and resistance levels even during the fall and rising market. As not all indicators and strategy are 100% accurate hence, we should not use the entire capital in one trade instead we can divide the capital in 3 to 4 parts and use remaining amount if market goes against the strategy. Averaging 2 time is fine but not at every dip, if market keep going down then understand that it is a downtrend and wait for the next buy signal.

_{Disclaimer: The information provided in this blog is for educational and informational purposes only. It should not be construed as investment advice or a recommendation to buy or sell any securities mentioned. Investing in the stock and crypto market involves risks, including the potential loss of principal. Readers are encouraged to conduct their own research and consult with a qualified financial advisor before making any investment decisions. The author of this blog is not liable for any losses or damages arising from the use of the information provided herein.}

Author,
@steam4u
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