Trading Transformation Day 22

Breaker Blocks Overview

• Previously explained how breaker blocks are useful.
• Today: identifying breaker blocks on the chart.
• Importance: areas with a lack of orders in the opposite direction.

Identifying Breaker Blocks

Uptrend Example

• Retracement areas fill sell orders.
• Break of Structure (BoS) indicates breaker block.
• Price revisits breaker block = continuation confluence.
• Similar to a fair value gap.

Downtrend Example

• Retracement areas fill buy orders.
• Breaker block formed before BoS downward.
• Price enters, lack of buy orders, price likely to go lower.

Characteristics of Breaker Blocks

• Opposite of order blocks.
• Bullish Breaker: Move down before BoS upwards.
• Bearish Breaker: Move up before BoS downwards.

Practical Identification

Example 1

• Break of structure upward on hourly chart.
• Two possible legs identified as breaker blocks.
• First offering better entry post-BoS.

Example 2

• Large leg up followed by BoS downward.
• Identify move down pre-BoS to find breaker block.
• Price revisits breaker block, see selling power, price continues lower.

Example 3

• BoS upward, failed revisit, shows context of several confluences.

Confluence and Context

• Combine with fair value gaps, imbalances, order blocks.
• Look for reactions indicating direction.
• Not every breaker block leads to the expected outcome.

Recap and Future Steps

• Understand breaker blocks identify reaffirming examples.
• Confluences needed, not isolated signals.
• Next: Putting together strategy from all concepts.
• Plan for taking trades, finding daily bias, and implementing confluences.

Note: Identification and confluence assembly demonstrated; strategies will follow in subsequent sessions.