ICT Breaker Block Trading Strategy

[ict Trader]

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 Block​

1. Find a Swing High/Low Break – Price breaks a key level but fails to continue.
2. Look for a Strong Rejection – A sharp reversal candle (e.g., Pin Bar, Engulfing).
3. 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 Strategy​

Entry 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)​

1. Price breaks swing high but reverses.
2. Forms a Breaker Block (rejection candle).
3. Price retests the block and drops.
4. Trader shorts with SL above the block.

Final Thoughts​

The 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: What is ICT Breaker Block Trading Strategy (Complete Guide)