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Back to Smart Money Concepts
Smart Money Concepts

Breaker Blocks

Overview

A breaker block is a failed order block that becomes a powerful support or resistance level when price returns to it from the opposite side. When institutional buying or selling at an order block is overwhelmed and price breaks through, the original order block transforms into a breaker block. Smart money uses these levels to re-enter in the new trend direction as they represent an area where the previous thesis was invalidated.

Key Concepts

A breaker block forms when an order block fails and price breaks through it decisively. The failed order block becomes support if it was previously resistance and vice versa. Breaker blocks represent trapped traders from the failed order block who will exit at break-even when price returns. Institutional traders use breaker blocks to add to positions in the new trend direction. Breaker blocks are more reliable when they coincide with a change of character or break of structure. Volume should confirm the invalidation of the original order block.

Entry Signals

Identify an order block that has been broken by a strong impulsive move in the opposite direction. Wait for price to retrace back to the broken order block — this is the breaker block level. Enter when price shows rejection at the breaker block with a lower-timeframe confirmation entry. Look for displacement candles away from the breaker block to confirm institutional participation.

Exit Signals

Target the next liquidity pool or structural high or low in the new trend direction. Stop beyond the breaker block with a small buffer for wicks. Partial profit at the first opposing order block or fair value gap. Exit if price trades cleanly through the breaker block without rejection, invalidating the level.

Best Timeframes

5M, 15M, 1H, 4H

Pro Tips

Breaker blocks are essentially the smart money version of broken support becoming resistance and vice versa. The key advantage of the breaker block concept is that it provides precise entry levels derived from order flow context rather than arbitrary horizontal lines. Combine breaker blocks with fair value gaps for the highest-conviction entries.

More Topics in This Category

Mitigation Blocks

Mitigation blocks are price levels where institutional traders return to 'mitigate' or close out prior losing positions before continuing in the new trend direction. When smart money takes a position that initially moves against them, they mark the level for re-entry — when price returns, they close the losing trade at break-even and add to their new directional position. This creates a powerful support or resistance zone.

Change of Character (ChoCH)

A Change of Character is the first break of structure AGAINST the prevailing trend. In an uptrend, ChoCH is the first lower low. In a downtrend, ChoCH is the first higher high. ChoCH signals a potential trend reversal and is one of the most important SMC concepts for identifying turning points.

Institutional Candles

Institutional candles (also called displacement candles or impulse candles) are large-bodied candles with little to no wicks that represent strong institutional activity. They break through structure and create FVGs. The characteristics of these candles — body size, wick ratio, volume — reveal where institutions are committing capital.

Kill Zones & Session Timing

Kill zones are specific time windows during the trading day when institutional activity peaks and the most significant moves occur. ICT identifies four main kill zones: Asian session (20:00–00:00 ET), London Open (02:00–05:00 ET), New York Open (07:00–10:00 ET), and London Close (10:00–12:00 ET). Trading only during kill zones improves probability.

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