Mitigation block
Family XII · Other terms
Not to be confused with breaker block.
Mitigation block is a concept from price-action and smart-money trading that identifies a specific candlestick pattern as a potential order block. It is defined as the final opposing candle before an impulsive move that breaks market structure, on the premise that institutional traders who initiated the move may later return to that candle's range to mitigate, or partially offset, their positions. Unlike some order-block definitions, a mitigation block does not require the zone to be the origin of the move; it requires only that the move break structure.
Formation and identification
A mitigation block forms when a candle in the opposite direction of the prevailing trend is immediately followed by a strong impulsive move that breaks a prior swing high or low. The block is the body or the full range of that opposing candle, depending on the trader's chosen definition. The break of structure is essential: without it, the candle is not considered a mitigation block.
Traders often mark the zone and watch for price to return to it. The return is referred to as mitigation, based on the idea that the original institutional order was not fully filled and the remaining portion is executed when price revisits the area.
Worked example
Assume a market is in a downtrend. A bullish candle forms with a high of 1.1050 and a low of 1.1000. The next candle is a large bearish candle that closes at 1.0950, breaking the previous swing low at 1.0970. The bullish candle is the mitigation block. Later, price rallies back to the block and enters the zone between 1.1000 and 1.1050.
Distinction from breaker block
A breaker block is a failed order block that price has already violated, often signalling a reversal, whereas a mitigation block is an untested zone that price has not yet revisited. The visible sign is whether the zone has been traded through: a breaker block has been broken, a mitigation block has not.
Often confused with
- breaker block
- A breaker block is a supply or demand zone that has already been breached by price and now acts as support or resistance in the opposite direction, while a mitigation block is an untested zone that price has not yet revisited; the visible sign is that a breaker block has been traded through, whereas a mitigation block remains intact.