A Breaker Block is a failed breakout zone where price initially breaks a swing high or low but fails to sustain momentum, leading to a reversal. This creates a liquidity pool that smart money often targets before pushing price in the opposite direction.


Key Characteristics of a Breaker Block:✅ Failed Breakout – Price breaks a swing high/low but quickly reverses.✅ Liquidity Grab – Institutional traders exploit retail stop losses.✅ Reversal Zone – Acts as a support/resistance for future trades.


How to Identify a Breaker BlockFind a Swing High/Low Break – Price breaks a key level but fails to continue.Look for a Strong Rejection – A sharp reversal candle (e.g., Pin Bar, Engulfing).Mark the Breaker Block Zone – The area where price reversed (last candle before the break).Example:If price breaks a swing high but immediately drops, the high of the breakout candle becomes the Breaker Block.If price breaks a swing low but reverses, the low of the breakout candle is the Breaker Block.Trading the ICT Breaker Block StrategyEntry Rules:Wait for price to return to the Breaker Block zone.Look for price rejection signals (e.g., bearish/bullish engulfing, wick rejections).Enter on confirmation (e.g., break of structure, candle close beyond the block).Stop Loss & Take Profit:Stop Loss (SL): Just beyond the Breaker Block (allowing some room for volatility).Take Profit (TP): Target previous swing points or liquidity pools.Why Does the Breaker Block Work?Liquidity Hunting: Institutions trigger stops before reversing.Failed Breakouts: Retail traders get trapped, leading to reversals.Smart Money Alignment: Follows ICT’s concept of "Order Flow Manipulation."Chart Example (Breaker Block Trade)Price breaks swing high but reverses.Forms a Breaker Block (rejection candle).Price retests the block and drops.Trader shorts with SL above the block.Final ThoughtsThe ICT Breaker Block Strategy is a powerful tool for traders understanding institutional order flow. By identifying failed breakouts and liquidity zones, traders can align with smart money moves for high-probability reversals.


Pro Tips:✔ Combine with ICT Silver Bullet or Kill Zones for better timing.✔ Avoid over-trading – Wait for clear rejection signals.✔ Use on higher timeframes (1H/4H/Daily) for stronger setups.


Source: https://innercircletrading.website/ict-breaker-block-trading-strategy/