Session High/Low Retests: A Simple Continuation Setup

[FXS Prop Desk]

After a session high or low breaks, price frequently comes back to test it before continuing. That retest offers a defined entry with a natural stop.

Setup rules to test:

• A clear break of the Asian or early London high (close beyond it, not just a wick).
• A return to the level within a limited time, e.g. 30–60 minutes.
• A rejection at the level: pin bar, engulfing candle, or a quick M1 structure shift.
• Stop below the retest low (for longs), target at 1–2R or the next level.

Failure modes:

• The original break was false, and the retest becomes a full reversal.
• The retest goes deep beyond the level, making the stop large.

A filter worth testing: require the breakout candle to close at least 0.3 × ATR beyond the level, and skip retests that arrive more than an hour later.

Do you trade session-level retests, and how long do you allow for the retest to happen?

[Shadow Trader]

I trade these mostly off the Asian high and low on EURUSD, and the 0.3 ATR close filter matches what I settled on. I also cap retest depth: a close back inside the range by more than a third of M5 ATR kills the setup.

On timing I use 45 minutes. Retests arriving after an hour behaved more like a fresh range test than a continuation in my notes.

img_13613_r1.png (58.42 KiB) Viewed 2 times

The illustration shows the textbook version: the break candle closes 2 pips above the Asian high with M5 ATR near 6 pips, then price returns 25 minutes later and wicks 1 pip through the level. Entry goes on the rejection close at 1.1643, stop 2 pips under the retest low for 6 pips of risk, and the 2R target sits 12 pips higher.

The failure I see most is the retest that never quite arrives. Price stalls 2 or 3 pips above the level, and chasing that drift produced my worst entries.

Where do you put the entry, a limit on the touch or only after the rejection candle closes? I have done both, and the limit version gets more fills but noticeably uglier losers.