What it means
A mitigation block forms when price fails to make a new extreme (for example a lower high that does not take the previous high), then breaks structure the other way. The last candles of that failed swing become the zone.
Unlike a breaker, no liquidity was swept before the break.
Why traders use it
Traders who bought the failed swing are under water; when price returns, they may "mitigate" (close at a smaller loss), adding pressure in the new direction.
Chart examples
Bearish mitigation block
How to identify it objectively
- 1Find a swing high that fails to exceed the prior high (no sweep).
- 2Price then breaks the swing low below it.
- 3The up-candles of the failed swing form the bearish mitigation block.
- 4Watch for a retest and rejection.
Bullish use
- 1A swing low fails to take the prior low.
- 2Price breaks the swing high above.
- 3The down-candles of the failed low become a bullish mitigation block.
Bearish use
- 1A swing high fails to take the prior high.
- 2Price breaks the swing low below.
- 3The failed swing's up-candles become a bearish mitigation block.
What confirms it
- No sweep before the break.
- A close through the swing.
- Rejection on the retest.
What invalidates it
- A close back through the block in the original direction.
How a hypothetical setup is built
Entry
At the retest of the mitigation block with a rejection close.
Stop
Beyond the failed swing.
Target
The next liquidity in the new direction.
A hypothetical illustration of how the concept is turned into a plan, not a recommendation. Practise it on a paper account first.
Related concepts
- Fair Value Gaps & Order BlocksBreaker Block
- Fair Value Gaps & Order BlocksOrder Blocks
- Market StructureProtected and Weak Highs and Lows
Historical testing
Not tested on The Tradeskill yet.
Limitations: when it fails
- Often confused with breakers.
- Subjective without a strict swing setting.
- The retest can overshoot.
Knowledge check
Pick an answer to see the explanation. Nothing is saved.