The Breaker Block Secret: Why Most Traders Get Stopped Out
40sReveals a common trading mistake with a visual example that leads to stop-outs, tapping into traders' pain points.
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This video explains the concept of a 'breaker block' in trading, a price action pattern that can improve trade accuracy. It demonstrates how to identify bullish and bearish breaker blocks and contrasts them with order blocks, emphasizing that a breaker block only forms after a change in market structure.
Chapters
[00:02]
Introduction to Breaker Blocks
The video introduces the concept of a breaker block, stating that knowing it can make trades more accurate and efficient.
[00:16]
Bullish Breaker Block Example
The price forms a low, then a high, lower low, higher high. The price returns to the breaker zone and goes up. Many traders mistake it for an opposing block and go short, getting stopped out.
[00:28]
Definition of a Bearish Breaker
A bearish breaker is the lowest candle with a bearish close, the last swing low before the high was broken.
[00:40]
Market Structure Change
The price forms a high, goes to support, forms a low. Most see an order block and plan to enter long. The price breaks the high, then breaks the previous low, forming a lower low, then returns to support and goes lower.
[01:08]
Logic Behind Breaker Blocks
Price forms a low, longs open, price goes up, breaks the high, but then reverses and breaks the initial low. There is no breaker block without a change in market structure. A breaker block is not a failed order block.
[01:34]
Bull Breaker Example
The bull breaker looks similar but opposite: the last minor high before the low was broken. Price forms a low, goes to resistance, forms a high. Most see an order block and enter short. Price goes to a low low, returns to resistance, breaks it, forms a high high, then comes back and goes higher. Most traders get liquidated.
[02:04]
Conclusion and Call to Action
The video ends with a hint and a call to subscribe to the Telegram channel for daily trading sessions, entry points, stop-loss, take-profit, and training.
Breaker blocks are a powerful price action pattern that can help traders avoid false breakouts and improve entry accuracy, but they require a clear change in market structure to be valid.
Mentioned in this Video
Study Flashcards (5)
What is a bearish breaker block?
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What is a bearish breaker block?
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The lowest candle with a bearish close, the last swing low before the high was broken.
00:28
What is the key condition for a breaker block to form?
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What is the key condition for a breaker block to form?
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There must be a change in market structure.
01:20
Is a breaker block the same as a failed order block?
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Is a breaker block the same as a failed order block?
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No, a breaker block is not a failed order block.
01:20
How does a bull breaker block look?
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How does a bull breaker block look?
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It is the last minor high before the low was broken, appearing in the opposite direction of a bearish breaker.
01:34
What common mistake do traders make with breaker blocks?
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What common mistake do traders make with breaker blocks?
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They mistake them for order blocks and enter trades in the wrong direction, leading to stop-outs.
00:16
💡 Key Takeaways
💡
Breaker blocks cause stop-outs
Illustrates the practical impact of misidentifying breaker blocks, leading to losses.
00:16
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Definition of bearish breaker
Provides a clear, testable definition for identifying bearish breaker blocks.
00:28
⚖️
Breaker block requires market structure change
Establishes a crucial rule that differentiates breaker blocks from other patterns.
01:20
🔧
Bull breaker example
Shows the mirror image of the bearish pattern, reinforcing the concept.
01:34Full Transcript
[00:02] to make your trades more accurate and efficient. Knowing the breaker block has . Now look carefully at the graph here. The price forms a low, then a high, lower, low, higher,
[00:16] high. And look here carefully. The price returns exactly to this zone, to the breaker zone. She came back and after that went up again. Most people think that this is an
[00:28] opposing block and that it starts to go short. They are knocked out in their feet. A breaker block for a change in market structure or Market example of a bearish breaker. That is, this is the lowest candle with a bearish
[00:40] close, the last swing low before the high was broken. That is, on . The price forms a high, then goes to a support level and forms a low. Most of us see order block. After this, plans to enter into a trade.
[00:54] The price actually breaks through the high and goes down. Everyone is waiting for a pullback to go long. But after this, the price breaks through the previous low and forms a lower low, then returns to the support level and goes even lower.
[01:08] Hint: high, low, high, high, lower, low. Now I'll explain the logic behind this . That is, the price forms a low, longs are opened, the trader sees support, and the price is expected to go up. Then the price actually goes
[01:20] up, breaks through the high, but then turns around and breaks through that same initial low. Remember, there is no breaking block without changing the market structure. Also, a breaker block is not a failed order block. The bull breaker will
[01:34] look similar only in the opposite direction. That is, this is the last one in minhigh before the low was broken. That is, the price forms a low, goes to the resistance level, and forms a high. Here we have data,
[01:49] most traders see this candle as an order block and begin to enter the ASHR. The price actually goes to a low low, then returns to the resistance level and breaks through this level and forms a high high. Then it comes back
[02:04] and goes even higher. Most traders will be liquidated. Hint: low your trading more efficient? Subscribe to my Telegram channel and join my free trading community. There I conduct daily
[02:18] like sessions with the publication of specific entry points, stop-loss and take-profit. There is also training for beginners and personal support from me. Waiting for you personal support from me. Waiting for you inside.
