1. What is a “Breaker Block”?
2. How to identify a Breaker Block
3. How to trade using a Breaker Block🧵
🔷What is a “Breaker Block”?
breaker block is a failed Order block, that results in market liquidity being taken out and the market structure changing.
From bullish to bearish or vice versa.
In the second image you have an illustration of a Breaker Block
🔷How to identify a Breaker Block?
I will explain you STEP by STEP how to identify a Breaker Block within the present price action.
We will focus basically in 4 steps, which are the next ones
2.1 Swing Low is formed:
First of all, the Swing Low is formed by a wick. Represents the lowest point of the current price action.Important to MARK that Swing Low, since price can keep dumping, if that current low is lost.
2.2 That low created, is taken out:
The swing low made, has been taken out. That means, that a new low is being formed.
2.3 Failed Order block:
When a Order Block fails, a Breaker Block is created.And in the future, that level, will act as a support and resistance level.
2.4 Formation of a Breaker Block:
Price shifts above resistance, takes liquidity and comes back down to form a Breaker Block.
A "Breaker Block" occurs when price break above or below an order block, indicating a shift in the trend.
🔷 How to trade using a Breaker Block:
You MUST enter the trade when the price comes back to support.
The Breaker Block should function as support and therefore, hold the price.
A good volume will give you also great confluence to take the trade.
🗣️ I hope this THREAD has helped you to understand the concept of Breaker Blocks.
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