What is Bullish/Bearish Breaker Block & How to Find It Easily
Breaker blocks are easier to find than you think.
In this article, I will share with you very efficient price models for the identification of Order Blocks and Breaker Blocks.
You will learn their meaning, how to draw and use them in trading Smart Money Concepts SMC.
Bullish Trend Model & Breaker Block.
Let's start with an essential theory .
Please, examine a following price model:
In a classic bullish structure where the price consistently updates Higher Highs HH and Higher Lows HH, a bullish order block zone will be the area based on the last Higher How.
I will explain how to draw that zone in the examples below.
In some instances, a bullish order block zone will fail to deliver a bullish wave. Its bearish breakout will follow after its test instead.
It will be a critical event that is called a market structure shift in Smart Money Concepts SMC.
A formation of a new low will signify a violation of a bullish trend and a highly probable change of the market sentiment.
A broken bullish order block zone will turn into a Bearish Breaker Block.
The zone from where the next bearish wave will most likely follow.
It will provide a very safe place to sell from.
Market structure shift in a bullish trend is not a random event.
It usually occurs after a test of a significant supply zone with a liquidity grab.
It can help you to predict the change of the sentiment way before it happens.
That's an example of such a price model on GBPAUD forex pair.
We see a confirmed bullish liquidity sweep in uptrend after a test of a historic supply zone.
A bearish wave followed then and a bullish order block zone was broken.
To draw Order Block Zone, I picked the level of the last higher low as its lower boundary and a low of a body of that candlestick as the upper boundary.
After a breakout, it turned into a Bearish Breaker Block.
A bearish continuation occurred after its test.
Bearish Trend Model & Breaker Block.
Please, check this model:
In a classic bearish structure where the price consistently updates Lower Lows LL and Lower Highs LH, a bearish order block zone will be the area based on the last Lower High.
In some instances, a bearish order block zone will fail to deliver a bearish wave. Its bullish breakout will follow after its test instead.
It will be a significant event that is called a bullish market structure shift in Smart Money Concepts SMC.
A formation of a new high will signify a violation of a bearish trend and a highly probable change of the market sentiment.
A broken bearish order block zone will turn into a Bullish Breaker Block.
The zone from where the next bullish wave will most likely follow.
It will provide a very safe place to buy from.
Market structure shift in a bearish trend is not a random event.
It usually occurs after a test of a significant demand zone with a liquidity grab.
That's a real example of such a price model on WTI Crude Oil.
A bearish structure was violated after a test of a demand zone.
A bearish order block was broken, and it turned into a Bullish Breaker Block Zone then.
(Drawing a bullish order block zone, I picked the level of the last lower high as its upper boundary and a high of a body of that candle as its lower boundary )
A bullish movement followed after a deep test of that.
A proper combination of structure mapping and liquidity analysis will help you to predict a market structure shirt and a breaker block creation before they happen.
The models that I shared will help you to confirm bullish and bearish breaker blocks trading Forex or any other markets with Smart Money Concepts SMC ICT.
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