What are Breaker Blocks, and How to Trade Them?

Breaker blocks are previously violated order blocks that now act as resistance for price. There are two types of breaker blocks: bullish and bearish breaker blocks.

High Probability Breaker Blocks

High probability breaker blocks are not random. They form when price creates an inversion fair value gap (IFVG) or a liquidity void, giving the setup more weight and clarity.

How to Identify Breaker Blocks in Trading

To identify breaker blocks, look for an order block that has been violated and then observe how price reacts when it revisits that zone.

Here’s a step-by-step approach:

1. Find a valid order block – identify a bullish or bearish order block that led to a strong move away (market structure shift).
2. Wait for violation – price must break through that order block decisively, closing beyond it. This confirms it’s no longer a valid OB but now a breaker block.
3. Mark the last up candle (for bearish breaker) or the last down candle (for bullish breaker) before the violation.
4. Watch price return – when price retraces into that zone, check for confluence like IFVG, liquidity voids, or FVG alignment.
5. Observe rejection or continuation – the reaction at that breaker block tells you whether smart money is defending the area or using it as a continuation point.

How to Trade Breaker Blocks

Once identified, trading breaker blocks becomes a matter of context and timing. You’re not just trading the block; you’re trading the shift in narrative.

Here’s how to trade them:

1. Wait for displacement – price should break structure aggressively, creating an IFVG or liquidity void. This confirms institutional intent.
2. Mark the breaker block – highlight the violated OB (the last up or down candle before the break).
3. Wait for price to return – patience is key. Let price retrace to the breaker block area.
4. Look for confluence – if the breaker lines up with a fair value gap, imbalance, or liquidity pool, your probability just increased.
5. Enter with confirmation – look for lower time frame confirmations (e.g., shift in market structure or rejection candle) before entering.
6. Set risk below or above the block – for bullish breaker blocks, stop loss goes below; for bearish, above.
7. Target liquidity – focus on obvious highs/lows, equal highs, or imbalances as your take-profit areas.

Final Thoughts

Breaker blocks tell the story of where institutions changed their sentiment. They’re not just another Smart Money Concept; they are evidence of where smart money rejected old inefficiencies and repriced the market.

At GhostTraders, we focus on teaching you not just to identify these structures but to understand their logic, why they form, how they trap liquidity, and how to execute with confidence when price returns.