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Gold—EUR/USD—Volatility 75—US 500—Oil—

Lesson 14 of 20 · 10 min

Breaker Block

Step 1

What it is

A breaker block is an order block that failed. Price moved away from a candle, came back, and closed straight through it.

Some traders then watch that same candle from the other side. A level that used to push price down may now hold price up. It is the same old idea as support turning into resistance, only with a more modern name.

Traders use it because the failure tells them something: whoever was on the other side has been proved wrong, and the failed level gives them a clear place to plan around.

Step 2

See it on a chart

A candle that started a move down fails when price closes back through it.

3988.13997.24006.24015.34024.4XAU/USD · 15m · illustrativeTick volume123456

Illustrative chart with made-up prices and tick volume, built for teaching. It is not real market data and not a trade idea.

Step 3

The exact rules

What must be true before entry

  • A candle that started a move against the trend.
  • Price then takes out a swing high or low.
  • Price closes back through that candle with a strong body.

What volume should show

The candle that closes back through the level should be busy. A close through on quiet volume is less convincing.

Where to enter

Inside the breaker on the first return to it.

Where the hard stop goes

A hard stop past the far side of the breaker.

Where the target goes

Aim for a clear objective that offers at least 3:1. If the nearest realistic objective gives you less, there is no trade.

What invalidates the idea

  • Price closes back through the breaker.
  • Price drifts sideways through it instead of reacting.

When not to take it

  • Only a wick went through the candle, with no close.
  • The objective is too close to offer 3:1.
  • Major news is due soon, or you would be trading outside your planned hours.
  • You have just taken a loss and feel the need to win it back.

Step 4

Your turn: plan the trade

A level failed when price closed through it to the downside, and price has now come back up to test it. Mark your plan.

This setup is a short. Look at the candles and the volume. Choose a line below, then tap the chart to place it. You can also drag its label or type a price.

1.14511.14701.14881.15061.1524EUR/USD · 15m · illustrativeTick volume

Illustrative chart with made-up prices and tick volume, built for teaching. It is not real market data and not a trade idea.

Step 5

The trap: flipping sides out of frustration

A breaker is about a failed level, and a failed level often means you just lost on the other side of it. Flipping straight round to win it back is revenge trading wearing a technical label. If you lost on the first move, take a break before you consider the second.

Read about revenge trading

Step 6

Write it down

Optional. Only you can see this.

Keep going