Lesson 8Breaker blocks and mitigation blocks

Breaker blocks and mitigation blocks

Lesson 08 · 6 min read · By DT Terminal

Know what a failed order block becomes: a breaker when a sweep came first, a mitigation block when it did not.

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Chapter 1 of 7

When an order block fails

An order block fails when a candle body closes beyond its distal line: below a bullish block's low, or above a bearish block's high. Many traders do not delete the block then. They watch it the other way round.

That is the old polarity flip: support that breaks is watched as resistance, and resistance that breaks as support.

ICT names two kinds of failed block. Which one you have depends on a single question: did price take the liquidity at the old high or low before it broke the block?

Go deeper

The polarity flip is also called role reversal. You met the zone version of it in Day 11, supply and demand.

Chapter 2 of 7

The breaker: a sweep, then a break

A breaker forms when price sweeps liquidity first, then breaks the block that should have held.

  • Bullish breaker. A lower low sweeps the sell-side liquidity under an old low, then price breaks above the prior swing high with displacement. The last up-close candle (or candles) before that low is the breaker, watched as support on the retest.
  • Bearish breaker. The mirror: a higher high sweeps buy-side liquidity, then price breaks below the prior swing low. The last down-close candle before that high is watched as resistance.

A bullish breaker is usually an up-close candle, an old bearish block. "Bullish" names the direction the trade is expected to go, not the candle.

Chapter 3 of 7

The mitigation block: a break with no sweep

A mitigation block is the same flip without the sweep. The failing swing stops short of the old extreme, a higher low in the bullish case, a lower high in the bearish one. That shape is called a failure swing.

After the failure swing, price breaks through the block with displacement, and the last opposite candle before the failure swing is watched on the retest, in the direction of the break, exactly as a breaker is.

The only difference is the liquidity. A breaker took the stops beyond the old low or high first. A mitigation block did not. Whether that difference changes the results on your market is something to measure, not assume.

Chapter 4 of 7

Breaker or mitigation block: one question

Read each row left to right: the bullish case, then the same chart turned upside down.

Failed order blocks

Breaker, mitigation block, and a sweep that broke nothing

  • Bearish block
  • Bullish block
  • The old low or high

Bullish

a failed bearish block, watched as support

Bearish

a failed bullish block, watched as resistance

Breaker

sweeps the old low, then closes above the block

SweepRetestSSL
SweepRetestBSL

Mitigation block

a higher low, no sweep, then closes above the block

HLRetestSSL
LHRetestBSL

Sweep, no break

the block has not failed: nothing to flip

SweepSSL
SweepBSL
Ask one question. Did the failing swing take the old low (or high)? Yes is a breaker. No is a mitigation block. No close through the block is neither.
Schematic candles, not market data. The dashed box is the same block after a candle closes through it.

The most common mistake is calling every broken block a breaker. Without the sweep it is a mitigation block, and without a body close through the block it is nothing yet.

Chapter 5 of 7

Example 1: a bearish breaker

Sample candles, not real sessions. Example 1 is the order blocks lesson's EURUSD chart failing, in New York time (EDT).

Worked example

Example 01: EURUSD M15: the bullish block fails and becomes a bearish breaker

The worked example, with every number walked through, is in the app.

Example 1, step by step

The 02:45 bullish block and the 03:15 run to 1.08740 are the same as in the order blocks lesson. This time price does not hold. At 04:30 a candle closes at 1.08260, below the block's low of 1.08310, so a stop under it would have been hit. At 05:30 price climbs back into the old block, to 1.08380, and closes at 1.08290, back below it. Support has been watched as resistance, and price falls on to 1.08040.

Chapter 6 of 7

Example 2: a mitigation block

Sample candles, not a real session.

Worked example

Example 02: XAUUSD H1: a bearish block fails with no sweep

The worked example, with every number walked through, is in the app.

Example 2, step by step

Gold rallies from 4,021.00 to a swing high of 4,048.00. The last up-close candle there is a bearish block. The next drop stops at 4,029.50, above the old low, with no sell-side liquidity taken. A candle then closes at 4,052.60, above the block. When price comes back down it reaches 4,044.00, inside the old block, and closes at 4,051.20, back above it.

Chapter 7 of 7

Using a flipped block, and testing it

Traders who use these usually trade the retest in the direction of the break. Entry, stop and target are your own written rule; the model-building lesson turns one into a checklist.

BreakerMitigation block
Before the breakSweeps the old low or highStops short of it: a failure swing
The breakA body close through the block, with displacementThe same
Watched onThe retest, in the direction of the breakThe same
Tag itbreakermitigation

Then measure the two apart. If they give the same results in your sample, the sweep adds nothing for you, and that is worth knowing too.

Replay failed blocks bar by bar

Replay a month of EURUSD M15. At each body close through a block you marked, note whether the failing swing swept the old high or low, then what the retest did.

Tag breakers and mitigation blocks apart

Tag each trade "breaker" or "mitigation". After a few dozen, filter the Trade Log by each tag and by Outcome, and compare.
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