If the price retraces after the breakout of the support/resistance level and then continues in the direction of the breakout, then an FTR or fail to return forms.
Let me explain to you with an example. The red line shows the resistance level. After the resistance breakout, the price will retrace a bit. The price must break the recent price high, and then FTR will be confirmed. The retracement area or price consolidation will act as a base region to draw the FTR Zone.
After the high breakout, we can draw the FTR zone and trade it.
There is always strong buying/selling pressure at the FTR zone, which is why the price was not able to return and a fail to return formed.
How to trade the FTR?
After confirmation of FTR, we can trade on price the first time back to the FTR. It is also called FTB or first time back. Price can mostly return to the FTR zone after its formation or after a few swings.
To find a high probability of an FTR zone, the key level or S&R levels must be strong, and you should also check how the price returns to the FTR. For example, we can also trade FTRs in the market trend direction.
Example #1
Analyzing the image below, you can see that the price first broke the low resistance level. After the breakout, the price made a consolidation or retracement and then continued in the direction of the breakout, making a valid FTR. Now, we can use the base region to draw the FTR zone and trade it on FTB.
On the first time back, the price significantly reversed, showing the validity of FTR.
Example #2
This is the second example of an FTR zone. FTR was formed after the breakout of a support level.