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    ICT Breaker Block Trading Strategy - Explained With Examples

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    chadleruo099

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    ICT Breaker Block Trading Strategy - Explained With Examples

    Uploaded by

    chadleruo099
    1K views6 pages

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    © © All Rights Reserved

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    Copyright:

    © All Rights Reserved
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    Download as pdf or txt
    1K views6 pages

    ICT Breaker Block Trading Strategy - Explained With Examples

    Uploaded by

    chadleruo099

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 6

    ICT Breaker Block Trading Strategy

    – Explained with Examples


    Ayub Rana Last Updated: December 21, 2023  0  106

    Do you want to master ICT breaker block trading strategy like a pro to
    level up your trading?
    Breaker block trading strategy is one of the various strategies used in
    technical analysis to predict the future move of any asset like forex
    currency pair s, commodit ies, crypto, stocks or indices. This strategy
    originates from smart money concepts & it s foundation lies on the
    concept of order blocks.
    In this article, we will teach you all about breaker block trading strategy
    from definit ion to it s formation and identification to it s use along wit h
    visual examples.
    To identify and trade a breaker block you must know about Order
    Block because a failed order block is known as breaker block.
    Lets start wit h defining breaker blocks.
    What is a breaker block?
    A breaker block is basically a failed order block which is found after a
    liquidit y sweep or market structure shift.
    No strategy is fool proof and SMC is one of them, So SMC traders buy
    at bullish order blocks and put their stop loss below the low of bullish
    order block. Like wise they sell at bearish order block and set their
    stop loss above the high of bearish order block.
    But the market makers take advantage of it and they hunt retail
    trader’s stop loss and move market in opposit e direction hence
    breaking the order block which turns out to be a breaker block.
    Types of breaker block

    As break block is originated from order block and order blocks are of
    two types so the breaker block also has two types.
    (I) Bullish Breaker Block
    (II) Bearish Breaker Block
    Bullish Breaker Block – A bullish breaker block is basically a failed
    bearish order block. When a bearish order block is broken ( price
    close above the high of bearish order block ) it act as a support and
    push prices higher so it is known as bullish breaker block.
    But to identify a valid bullish breaker block you need to check
    following things.
    (I) A valid bearish order block.
    (II) Price closing above the high of bearish order block.
    (III) Liquidit y sweep.
    (IV) Market structure shift (MSS).

    Bearish Breaker Block – A bearish breaker block is basically a failed


    bullish order block. When a bullish order block is broken ( price closes
    below the low of bullish order block ) it act as a resistance and push
    prices lower so it is known as bearish breaker block.
    But to identify a valid bearish breaker block you need to check
    following things.
    (I) A valid bullish order block.
    (II) Price closing below the low of bullish order block.
    (III) Liquidit y sweep.
    (IV) Market structure shift (MSS).
    Bullish Breaker Block Trading Strategy
    In trading we prefer to go wit h the trend of market, as you know
    trend is our friend, so we use bullish breaker block in bullish trend.
    In bullish trend when market makes a bearish order block to engage
    sellers, we wait for the market to hunt stop loss of sellers and break
    above the bearish order block.
    When price closes above the high of bearish order block, (sweeping
    the liquidit y of sellers and shifting market structure) the broken
    bearish order block will now act as bullish breaker block.
    To take a trade we will wait for the price to test Bullish breaker block
    area and then we can execute a buy trade, we can also look for other
    confirmations like market structure shift in that area in lower time
    frame.
    A real market example is shown below in the picture.
    While executing a trade using bullish breaker block you should set
    your stop loss 10/20 pips below the low of bullish breaker block.
    Bearish Breaker Block Trading Strategy
    As we discussed earlier trend is our friend, so we use bearish breaker
    block in bearish trend.
    In bearish trend when market makes a bullish order block to engage
    buyers, we wait for the market to hunt stop loss of buyers and break
    above the bullish order block.
    When price closes below the low of bullish order block, (sweeping the
    liquidit y of buyers and shifting market structure) the broken bullish
    order block will now act as bearish breaker block.
    To take a trade we will wait for the price to test Bearish breaker block
    area and then we can execute a sell trade, we can also look for other
    confirmations like market structure shift in that area in lower time
    frame.
    A real market example is shown below in the picture.

    While executing a trade using bearish breaker block you should set
    your stop loss 10/20 pips above the high of bearish breaker block.
    Final Thoughts

    While using a breaker block in forex trading, we should keep in mind


    that no strategy is foolproof in forex, so you should not risk all your
    capit al on this strategy.
    Plus to mit igate your risks, you should always trade wit h stop loss in
    place to keep your equit y safe.

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