Breaker block retest

The rules

Setup

• Price makes a lower low that sweeps the sell-side liquidity under an old low (mirror it for bearish)
• Then a candle closes above the prior swing high
• Mark the breaker: the last up-close candles before that lower low

Entry

• Enter when price comes back to the breaker, in the direction of the break

Stop

• Below the breaker, or below the swept low

Target

• The next liquidity above, such as old highs

Manage

• The sources leave management open: set your own

Common mistakes

• Calling any broken order block a breaker. Without the liquidity sweep it is a mitigation block, or nothing.
• Reading the candle colour. A bullish breaker names the trade direction, not the colour of the candle.
• Marking it after the fact. Breakers are clear in hindsight. Practice spotting them bar by bar.

When it's off

• Not a breaker without the sweep first (that is a mitigation block)
• Call it off if a candle closes back through the breaker

Words to know

Breaker block

A failed order block where price swept liquidity first. Bullish: a lower low takes the sell-side liquidity under an old low, then price closes above the prior swing high, and the last up-close candle before that low is watched as support on the retest (bearish is the mirror).

Mitigation block

A failed order block with no sweep: the failing swing stops short of the old extreme (such as a higher low), price then breaks through the block with a fast move, and the last opposite candle before the failure swing is watched on the retest in the direction of the break.

Order block

A bullish order block is the last down-close candle before a fast move up that breaks structure (a close through a prior swing high); a bearish one is the last up-close candle before a fast move down that breaks a prior swing low. Academy marks it from the candle's open to its far wick, and a candle body closing beyond that far edge is the usual invalidation.

Liquidity sweep

Price trades beyond an obvious high or low, fills the orders resting there, and closes back inside. Academy's test is a wick beyond the level with the same candle's body closing back inside; a body close beyond is a real break, and a sweep alone reverses nothing. ICT's loose use of "turtle soup" means this.

Break of structure

A break beyond a swing point in the direction of the trend: in an uptrend, a close above the last high; in a downtrend, a close below the last low. It says the trend is carrying on, and Academy counts body closes, not wicks.