ICT Breaker & Mitigation Blocks EXPLAINEDToday, we’re diving into two powerful concepts from ICT’s toolkit that can give you an edge in your trading: Breaker Blocks and Mitigation Blocks. There are one of my favourite PD Arrays to trade, especially the Breaker Block. I’m going to explain how I interpret them and how I incorporate them into my trading. Stay tuned all the way to the end because I’m going to drop some gold nuggets along the way"
Ok, so first of all let’s go through what both these PD Arrays look like and what differentiates them, because they are relatively similar and how they are used is practically the same.
On the left we have a Breaker Block and on the right a Mitigation Block. They both are reversal profiles on the timeframe you are seeing them on, and they both break market structure as you can see here. The actual zone to take trade from, or even an entry from, in the instance of this bearish example is the nearest down candle or series of down candles after price makes a lower low. When price pulls back to this area, one could plan or take a trade.
The defining difference is that a Breaker raids liquidity on its respective timeframes by making a higher high or lower low before reversing, whilst a Mitigation Block does not do that. For this reason, a Breaker is always a higher probability PD Array to trade off from. As you should know by now if you are already learning about PD Arrays such as these is that the market moves from one area to liquidity to another. If you don’t even know what liquidity is, stop this video and educate yourself about that first or you will just be doing yourself a disservice.
Alright, so let’s go see some real examples on the chart. Later on I’ll give you a simple mechanical way to trade them, as well as a the discretionary approach which I use. And of course, some tips on how to increase the probability of your setups.
Breaker
CHFJPY - Multitimeframe AnalysisCJ is looking good for shorts. We have multiple confluences for it as explained in the video.
Summary:
Monthly Timeframe:
- Price has just run up higher filled in a Fair Value Gap perfectly. It seems to be reversing from here.
Weekly Timeframe:
- We have an unmitigated Orderblock. Since this orderblock was a "Sell to Buy", means that the selling positions from Smart Money are currently in extreme minus positions, and they will want to reprice lower to mitigate out of their minus positions.
Daily Timeframe:
- We are creating SMT Divergence with its correlated pair - EURJPY. This means that CHFJPY went higher to run out the buy stops and made higher highs, will EJ is creating lower highs. CJ will most likely distribute to then run lower.
- Price has just reacted off a Daily Bearish Breaker Block, which should push price lower.
- Huge Imbalance FVG Gap. Price will come back to fill it as fast as possible.
- Massive Consolidation. Below these consolidations, there are lots of sell stops that will get taken out.
H2 Timeframe:
- Potential Sell POI. Valid Orderblock + Breaker that also caused the last low to get broken to the downside (Break in Market Structure - BMS).
- We have a Bearish Trendline that has three beautiful touches. Everyone that already is in Shorts from the trendline will get liquidated at the next mitigation of the Trendline up into the OB + Breaker and sell off further from there.