Beginners often mix up order blocks, breaker blocks and mitigation blocks. They are closely related, and the difference is small but useful. This guide explains each one in plain words, using the rules the ICC Charts engine uses, and also covers the rejection block.
Start with the order block
A bullish order block is the last down-close candle at or just before the low of a move that then breaks structure upward. A bearish order block is the mirror image. The block is only known once the break has closed. For the full basics, read order blocks and breaker blocks.
The engine also tracks what happens to a block afterwards:
- Mitigated: price first trades back into the block.
- Mean threshold (MT): the 50 % line of the block candle's body. A candle close beyond it means the block was not respected well.
- Failed: a candle closes beyond the far end of the block.
When a block fails
A failed block is not useless. Like a gap that is inverted, it can start to act from the other side. What it is called depends on one question: did the move that created it sweep a prior swing, that is, take liquidity?
- Yes: the failed block is a breaker block.
- No: the failed block is a mitigation block.
So a mitigation block is an order block that failed without the liquidity grab behind it. Many traders see it as the weaker cousin of the breaker, because there was no sweep of liquidity before the turn.
Order block, breaker and mitigation side by side
- Order block: intact, acts from its original side.
- Breaker block: failed after the move took liquidity; now acts from the other side.
- Mitigation block: failed without taking liquidity; now acts from the other side.
In the terminal, the Order Blocks layer draws intact blocks as +OB or -OB. A failed block turns grey and is labelled "Breaker" or "Mitigation", with the MT line drawn through it.
A simple example
Illustration only, on a 5-minute chart:
- A bullish order block forms after a break of structure upward. The block's leg did not sweep an earlier swing low.
- Price returns and a candle closes below the far end of the block. The block has failed.
- Because there was no sweep, the engine labels it a mitigation block.
- Later price rallies back up into it. A trader may watch for rejection there, with a stop above the zone, instead of expecting a bounce upward.
What about the rejection block?
A rejection block is a different idea. It is built from a swing extreme that has a long wick. The engine looks at swing highs and swing lows where the wick is at least half of the candle's range. The zone runs from the edge of the candle body to the tip of the wick. A swing high gives a bearish rejection block, and a swing low gives a bullish one. It is a record of price being pushed away from a level.
How to use these zones with care
- Start with structure. Check the market structure shift and the bigger trend before any block.
- Look for the sweep. A breaker with a clear sweep is usually more convincing than a mitigation block.
- Combine with a gap. A block that overlaps a fair value gap is the base of the Unicorn model.
- Wait for a reaction. A zone is an area of interest, not a promise.
A quick checklist
- Is the block intact, or has a candle closed beyond its far end?
- If it failed, did the original move sweep a prior swing?
- Where is the mean threshold, and did a candle close beyond it?
- Does the zone agree with the higher-time-frame direction?
- Where would the idea be proven wrong, and is that stop distance acceptable?
Answering these five questions in order keeps you from trading a coloured box just because it is on the screen.
Practise it
Turn on the Order Blocks layer in the terminal and scroll back. For each grey block, check whether the engine calls it a breaker or a mitigation block, and what price did next. The models page shows which models use these zones.
Education only. ICC Charts is not affiliated with Inner Circle Trader (Michael J. Huddleston); these ideas are explained in our own words. No zone works every time. Trading involves risk; practise on a demo account first.
Open ICC Charts in your browser, free, with the ICT and VSA layers and the model scanner. Or practise on past charts in the free Chart Challenge game.
Open it on the chart → Play the chart gameOn MetaTrader 5? Our free FVG & order block indicator draws these zones on your MT5 charts with the same rules as ICC Charts (free account).
New articles and the daily chart challenge on Telegram → t.me/icccharts
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