Every breakout trader has had this argument with themselves. Price clears a level it couldn't get past for weeks. Do you buy now, before it runs without you? Or do you wait for it to come back, test the level, and buy only if it holds?
We tested both on Trade Manager on 4 October 2026, across all 503 stocks in the S&P 500, changing one setting between the two runs. Buying the breakout straight away won 32% of 277 trades and lost money. Waiting for the retest won 40% of 124 trades and came out ahead. Here is how the test worked, where the difference came from, and what it doesn't prove.
The rules
Both runs used the same single block, on the daily timeframe:
- Trigger: a 20-day breakout. A stock pushing above its highest price of the previous 20 trading days, using the Breakout block's default checks.
- The one difference: Require Retest. Off in the first run, so the trade is bought at the next day's open after the breakout. On in the second, so the breakout only arms the trade. The strategy then waits at least 3 days for price to come back, takes the first day whose low dips within 0.3% of the broken level, and buys at the next day's open. If no retest comes within 15 trading days, the setup is dropped.
- Exits: identical in both runs. A 6% target and a 3% stop.
A note on those exits, because they matter. Most traders don't exit at a fixed percentage. They exit at a level, or when their own rules tell them to. We used fixed exits anyway, and kept them identical, for one reason: it makes this a clean test of the entry. Everything except the retest setting was the same, so any difference in the results comes from when the trade was bought.
The result
| Buy the breakout | Wait for the retest | |
|---|---|---|
| Trades | 277 | 124 |
| Stocks that traded | 214 | 109 |
| Won | 89 | 50 |
| Win rate | 32.1% | 40.3% |
| Win rate needed with these exits | 33.3% | 33.3% |
| Average trade | −0.13% | +0.50% |
| Average hold | 5 days | 5 days |
| Universe and window | 503 of 503 stocks, April to October 2026 | |
Waiting took fewer than half as many trades, and the trades it did take won eight points more often. With a 6% target and a 3% stop, a strategy has to win a third of its trades just to break even (here is why). Buying straight away landed just under that line. Waiting cleared it with room to spare.
We are leading with the average trade rather than a total return on purpose. Compounding a few hundred trades one after another produces a dramatic headline number in either direction, and that number says more about compounding than about retests. Per trade, before costs, waiting averaged +0.50% and buying straight away averaged −0.13%.
One breakout, bought two ways
The clearest example in the run was Applied Materials (AMAT). Buying the breakout got it at $460.53, and the stop was hit the same day at $446.71. Waiting five days for the retest bought the same breakout at $444.54, and it reached the target, $471.21, the next day.
Lam Research (LRCX) went the same way. The breakout entry at $286.25 was stopped out after eight days. The retest entry at $268.14 hit its target the next day.
It wasn't one-sided
Those two are the best cases for waiting, so here is the fuller picture. We matched up every case where both versions traded the same breakout on the same stock. In 32 of them, buying straight away lost and waiting won. In 12, it went the other way: the breakout trade won and the retest trade lost. Waiting isn't magic. It won the argument more often in this sample, which is a different thing from always being right.
Month by month
| Month (2026) | Buy the breakout | Wait for the retest |
|---|---|---|
| April | 5 trades, 20.0% | none yet |
| May | 61 trades, 32.8% | 18 trades, 33.3% |
| June | 67 trades, 32.8% | 31 trades, 45.2% |
| July | 74 trades, 35.1% | 33 trades, 45.5% |
| August | 45 trades, 24.4% | 29 trades, 34.5% |
| September | 23 trades, 30.4% | 11 trades, 27.3% |
Waiting won more often in June, July and August, was level in May, and did worse in September, on only 11 trades. October had two trades each, too few to count. That is steadier than our gap fill test, where the month swamped the setting, but September is a reminder that a good stretch isn't proof.
Why waiting might help, and what it costs
A retest does two things. It filters out breakouts that fail straight away, which are exactly the trades that hit a stop fast. And when it does buy, it buys lower, closer to the level that just broke. The cost is every breakout that never looks back: those run without you. In this test that cost was worth paying. A different market, or different exits, could change that.
What this test doesn't prove
A small sample. 124 trades is enough to be interesting and not enough to be sure. A few trades either way would move the win rate noticeably.
Fixed exits. With exits at a level instead of a fixed percentage, both versions would behave differently. A retest arguably suits level-based exits better, because the stop has an obvious place to go: just under the level. We haven't tested that here.
Survivorship bias. The test uses S&P 500 membership as it stands today. Companies removed from the index during the period are missing, and removals skew toward poor performers.
Frictionless fills and one window. Trades fill exactly at the target or the stop, with no commissions or slippage, over about six months of one market. A winning backtest under friendly assumptions is only probably a winner.
Run it yourself
- Open the strategy from the button on this page. It is the retest version of the test above.
- Look at the Breakout block: 20-day lookback, Require Retest set to Same as Strategy.
- Run the backtest on the S&P 500.
- Set Require Retest to Off and run it again. Those two results are the whole comparison.
- Then change the exits to the ones you actually use, and run both again.
Backtests replay bar by bar using the same evaluation code as the live scanner, so the retest version you test is the same one that alerts you once it's switched on. For a breakout test that added a volume filter instead, see how to backtest a breakout strategy. To check what win rate your own exits need, use the break-even calculator.