ICT Setup 02 Breaker Blocks + Reversal Candles

The ICT Setup 02 Breaker Blocks + Reversal Candles indicator is an automated technical analysis tool designed to identify and visualize institutional reversal zones. It streamlines the detection of Bullish and Bearish Breaker Blocks, helping traders recognize high-probability entry points based on market structure shifts and failed order blocks.

Usage

The indicator automates the identification of two primary setups based on ICT concepts:

• Bullish Breaker Block Setup: Occurs when a Bearish Order Block fails and the price breaks above its high. This zone is then repurposed as a support level. Traders typically look for a retest of this zone to enter long positions, often placing stop-losses below the breaker zone.
• Bearish Breaker Block Setup: Formed when a Bullish Order Block is broken to the downside. This zone becomes a resistance level. Traders utilize the retest of this area to enter short positions, typically placing stop-losses above the high of the breaker zone.

The tool also incorporates reversal candle patterns (such as Engulfing, Pin Bars, and Piercing Lines) to provide additional confirmation when the price interacts with these institutional zones.

Details

A Breaker Block is fundamentally a "failed" Order Block. In ICT methodology, when an Order Block fails to hold price as expected and market structure shifts (MSB/CHoCH), the role of that specific price range reverses. This shift indicates institutional participation and a change in market direction. The indicator calculates these zones by tracking pivots and identifies when price action invalidates an existing order block, subsequently converting it into a Breaker Block.

Settings

• Pivot Period: Determines the look-back period for identifying high and low pivot points. Higher values capture significant long-term shifts, while lower values focus on intraday volatility.
• Breaker Block Validity Period: Sets the maximum number of bars a Breaker Block remains active on the chart.
• Mitigation Level OB: Defines which level within the block is used for mitigation (Proximal, 50% OB, or Distal).
• Breaker Block Refinement: When enabled, it refines the zone based on two modes:
  • Aggressive: Provides a tighter, more precise range for entries.
  • Defensive: Provides a wider, more conservative range.

FAQ

How do I use the reversal candle signals?

Reversal candles act as a secondary confirmation. When a candle signal appears within or near a Breaker Block zone, it indicates a higher probability of the price respecting that level.

Can I adjust the sensitivity of the zones?

Yes, by adjusting the Pivot Period, you can control whether the indicator detects major structural changes or smaller, local price shifts.

How do I get access to ICT Setup 02 Breaker Blocks + Reversal Candles?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.