{"term":{"slug":"breaker-block","term":"Breaker Block","definition":"A failed order block that gets violated by price and then acts as a support/resistance level in the opposite direction. When an order block breaks, the institutional orders that created it are now trapped, and the level flips from support to resistance (or vice versa).","extendedExplanation":"Breaker blocks are one of the more advanced smart money concepts. The logic: when an institutional order block fails (price breaks through it instead of bouncing), the traders who placed orders at that level are now underwater. When price returns to that level, those trapped traders exit at breakeven, creating selling pressure at what was previously support (or buying pressure at what was previously resistance).\n\nFor prop firm traders, breaker blocks provide high-probability reversal entries because:\n1. The level has proven institutional interest (it was an order block)\n2. The violation means the original thesis failed, so the opposite direction is likely\n3. Trapped traders exiting at the level provide fuel for the reversal\n\nBreaker blocks are especially useful on prop firm accounts because they offer tight stops (just beyond the breaker level) with strong reward potential. The risk-reward is typically 1:2 to 1:4, making them ideal for accounts with tight daily loss limits.","exampleWithNumbers":"ES has a bullish order block at 5200. Price drops through 5200 to 5185, invalidating it. The zone at 5195-5205 becomes a breaker block (now resistance). Price recovers to 5200 and stalls. Short entry at 5198, stop at 5210 (12 points = $600/contract). Target: 5165 (33 points = $1,650). R:R = 1:2.75. On TopStep $50K with $1,000 daily loss limit, 1 contract risks 60% of the daily budget.","category":"strategy","relatedTerms":["order-block","smart-money-concepts","fair-value-gap","market-structure"]},"_links":{"self":"https://runvigil.app/api/glossary/breaker-block","page":"https://runvigil.app/learn/breaker-block","allTerms":"https://runvigil.app/api/glossary","learn":"https://runvigil.app/learn"}}