How To Trade Mitigation Block, Breaker, and QML.
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How a breaker and mitigation block get formed
A mitigation block is a reversal pattern formed when the market fails to make a higher high or lower low. In simple terms, a mitigation block results from a failure swing in the foreign market. In contrast, a breaker results from a successful swing in the market. Meaning price will form higher highs, collecting buy-side liquidity on previous highs, or forming lower lows; collecting sell-side liquidity on previous lows if it's a bullish mitigation block.
comparison between a breaker and mitigation block
A breaker forms a higher high, while a mitigation block forms a lower high. When these unfold, we are looking for trading opportunities in the market. A breaker will collect buy-side liquidity on the previous high creating a new higher high, while a breaker will fail to collect buy-side liquidity forming higher lows.
Meaning a mitigation block is a result of a failure swing. In comparison, a breaker results from a successful swing in the market.
Different types of mitigation blocks and breaker blocks
- Bearish mitigation block and bullish mitigation block
- Bearish breaker block and bullish breaker block
How to trade bearish mitigation block and bullish mitigation block.
A bearish mitigation block occurs when a failure swing results in a lower high after the price has failed to collect buy-side liquidity on previous highs due to an order block or rejection block. So, this means a bearish mitigation block results from a failure swing due to an order block or rejection block. pushing price down to collect sell-side liquidity on the nearest previous low, thus forming a lower low.
After price has formed a lower low, it will pull back up to fill the liquidity void which has been created as price was pushed down by the order block. To fill in liquidity voids, it will use the previously violated low as a point of reference to fill 50% of the liquidity void and then continue to bearish/sell. We can then use the previously violated low as our entry point with these in mind. Also, in our Fibonacci, we can see the previously broken low lining up with our equilibrium, giving confluence.
A bullish mitigation block occurs when there`s a failed collection of sell-side liquidity on previous lows in the market. A high low is formed after price has been unable to collect sell-side liquidity on previous highs due to an order block or rejection block. So this means a bullish mitigation block results from a failed collection of sell-side liquidity on previous lows due to an order block or rejection block. Pushing price up to collect buy-side liquidity on the nearest previous high, thus forming a higher high.
After price has formed a higher high, it will pull back down to fill the liquidity void created as price was pushed up by the order or rejection blocks. In an attempt of price pulling back to fill in liquidity voids, it will use the previously violated high as a point of reference to fill 50% of the liquidity void and then continue to be bullish. We can then use the previously violated high as our entry point with these in mind. Using our Fibonacci, we can see the previously broken low lining up with our equilibrium, giving confluence.
How to trade bearish breaker block and bullish breaker block.
A bearish breaker occurs when price creates a lower low, collecting liquidity pools by taking out the previous low and then pulling up and collecting buy-side liquidity on the nearest high than price will come back later to retest the previously violated high and continue to go down. This happens to close all the liquidity voids created our main goal is to wait for a pullback to the previously violated high and once we see a good rejection, we make our buy entries.
A bullish breaker occurs when price creates a higher high, collecting all the resting liquidity pools on previous highs forming a higher high. then price will drop, collect sell-side liquidity on previous lows, and form a lower low. after that price will retrace up to the previously violated low and retest then continue to drop. that’s where we will take advantage of price and sell short on the previously violated low.
Difference Between Qml and Breaker Block in forex
Don’t be confused by the QML structure and breaker structure, they are similar structures in fact it’s the same structure. The only difference between a breaker block in forex and QML is what we are targeting as our entry point. In a Breaker, we are targeting previously violated low after the lower low has been formed. whilst in a QML we are targeting the previously violated high that was formed when price was forming a higher high.
If price successfully sells short at our breaker level an FTR will be formed which is simply the high that will be taken out when price reaches back to our QML level. F.T.R it’s an abbreviation for Failure To Return. The reason it’s called a failure to return is that price failed to return to our expected level which is our QML in this case. The reason price failed is due to the breaker structure. A breaker structure is the one responsible for F.T.R[FAILURE TO RETURN] to our QML level Immediately. The Understanding of a breaker Structure and a Qml Structure is important. Instead of waiting for price to reach the level of our QML, we can take advantage of the breaker before price reaches our QML level
The trading concept that can be used with mitigation block and breaker block
Other Trading Concept that we can use for confluence with breaker block or mitigation block is the understanding of order flow in forex trading, this gives enlighten on which high or low is exposed to be taken out. this will guide us on the directional bias of the market.
The understanding of order flow coupled with fair value gaps and liquidity voids is gold, in the high probability trading concept. This helps you understand not only how to trade mitigation blocks.
Now you know How To Trade Mitigation Block, Breakers, and QML!!! all you need is to go back and backtest everything that has been discussed. Remember there are no shortcuts just work hard. full article with videos here:ghostTraders
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