Notes on ICT Breaker Blocks

Jul 28, 2024

Understanding ICT Breaker Blocks

Overview

  • Breaker blocks are often misused by traders.
  • Presenter has made over $700,000 trading ICT concepts.
  • The lecture aims to debunk myths about breaker blocks and provide actionable strategies.

What is a Breaker Block?

  • Bullish Breaker Block:
    • Consists of four key components:
      1. Low
      2. High
      3. Lower low
      4. Higher high
  • Bearish Breaker Block:
    • Consists of:
      1. High
      2. Low
      3. Higher high
      4. Lower low
  • Importance of context when trading breaker blocks to avoid failure.

Importance of Context

  • Traders often take random trades without understanding the context.
  • Key Concept: A breaker block is just one component; understanding market structure is crucial.

Using Breaker Blocks Effectively

  1. Identifying Breaker Blocks:

    • Look for accompanying liquidity pools (buy/sell side).
    • Wait for opposing liquidity to be taken before entering.

  2. Example Using NASDAQ:

    • Identify equal highs/low ranges and opposing liquidity.
    • Notice displacement after liquidity is taken.
    • Identify the specific candle to mark the breaker block.
    • Unicorn Scenario: A fair value gap aligned with a breaker block increases the probability of a successful trade.

Key Trading Model Principles

  • Fractality in the Market:

    • Patterns repeat across different time frames.
    • Each time frame offers opportunities to validate trades based on larger context.

  • Reasons Markets Move:

    1. Hunt for liquidity.
    2. Rebalance to inefficiencies.
    3. Rebalance to equilibrium.
    4. Generate continuous liquidity.

  • Each trade should align with one of these reasons for market movement.

Building Conviction for Trades

  • Additional Factors to Add Conviction:

    • Bigger timeframe analysis (e.g., fair value gaps).
    • SMT (Smart Money Technique) correlations.
    • Macroeconomic data points (e.g., 950 macro).

  • Importance of recognizing all these aspects before executing a trade.

Conclusion

  • Understanding breaker blocks requires comprehensive context and various influences.

  • The presentation encourages implementation of accumulated knowledge.

  • A mentorship program is available for further assistance.

  • Next Steps: Explore additional videos and concepts for a deeper understanding.