In the ICT (Inner Circle Trader) methodology, a Breaker Block is a powerful concept used to identify high-probability reversal zones in the market.
It builds on the idea of failed order blocks and helps traders spot institutional price manipulation and smart money re-entry levels.
1. What is a Breaker Block in ICT?
A Breaker Block is a former order block that fails to hold its direction (gets broken) but later becomes a strong support or resistance zone when the market revisits it.
In Simple Terms:
- An order block that gets invalidated becomes a breaker block.
- It is used as a re-entry zone for institutions after a liquidity grab.
2. Key Characteristics of a Breaker Block in ICT
| Condition | Description |
|---|---|
| Failure of Order Block | Price breaks through an order block instead of reacting |
| Return and Retest | Price later returns to that broken level |
| Acts as New S/R Zone | It then acts as support (in bullish case) or resistance (in bearish case) |
| Occurs After Liquidity Raid | Often forms after a swing high/low is raided |
3. Types of Breaker Blocks in ICT
1. Bullish Breaker Block
- A bearish order block that is broken to the upside
- Upon return, it acts as support
2. Bearish Breaker Block
- A bullish order block that is broken to the downside
- Upon return, it acts as resistance
4. Breaker Block vs Order Block in ICT
| Feature | Order Block | Breaker Block |
|---|---|---|
| Validated Reaction | Has an initial valid reaction | Failed to hold price |
| Becomes Invalid | Not used again after break | Becomes new S/R on return |
| Entry Point | Used before break | Used after break and retest |
5. Example: ICT Bullish Breaker Block in EUR/USD
1. Setup:
- Market forms a bearish order block.
- Price dips into OB, initially reacts, but then breaks through it.
- Price then retraces back to this zone (now broken).
- It acts as support and price rallies upward.
2. Interpretation:
- The original bearish OB failed.
- Institutions used that area to induce retail shorts, then reversed price.
- Upon return, institutions re-entered, making it a Bullish Breaker Block.
6. Steps to Trade a ICT Breaker Block
1. Identify the Order Block
Look for a significant swing high/low area followed by a strong move.
2. Wait for Invalidation
Price breaks above/below the OB, invalidating it.
3. Watch for Retest
- Mark the breaker block (old OB) zone.
- Wait for price to return during Killzones (like London Open or NY Open).
4. Confirmation Entry
- Look for confirmation like:
- Liquidity sweep
- Fair Value Gap (FVG)
- Market Structure Shift (BOS or CHoCH)
7. Ideal Confluences for Breaker Block Trades in ICT
- Occurs after liquidity sweep or stop hunt
- Aligns with a Fair Value Gap (FVG)
- Supported by a change in character (CHoCH)
- Price returns during a high-probability Killzone
8. Chart Example: Bearish Breaker Block in ICT
- Market is in an uptrend.
- A bullish order block forms and holds initially.
- Price breaks below the OB – invalidating it.
- On the return to the OB, it acts as resistance.
- Price drops – confirming it as a Bearish Breaker Block.
9. Why Breaker Blocks Are Effective in ICT
- They trap retail traders in the wrong direction.
- Represent institutional re-entry points after stop hunts.
- They offer high R:R setups due to tight stop losses above/below the breaker.
10. Conclusion
The ICT Breaker Block strategy is a powerful tool to trade smart money re-entry zones after a false move or liquidity grab.
By understanding how institutions invalidate levels and re-enter the market, traders can align with the real direction of price.
Leave a Reply