Invalid Breaker

Invalid Breaker

what this is about: What makes a breaker block invalid (which makes that breaker block a normal order block)

in the case of a supply turn demand

When price doesn’t reach the supply zone aggressively, that means that sell orders in the Supply zone were greater than you think and it was great enough to make a small pullback (even if it made no significant structure breaks). The fact that price made a small pullback shows that the sell orders in the Supply zone are valid and that price had the power to push lower.

https://www.tradingview.com/x/PMVVqY8Y/

So, when price pushes lower and gives a micro pullback, it has to be bought by institutions to make a large move up and break the supply zone. That large move up is the effect of buy orders when the pullback happened.

https://www.tradingview.com/x/NlI8tSbr/

That means that there were buy orders where the pullback happened and there were no buy orders in the supply zone (because there were buy orders where the pullback was, that area acts as a Demand zone).

https://www.tradingview.com/x/WdUOrWQT/

So, after price breaks out of the supply zone and comes back to it, there won’t be enough buy orders in the supply zone to push it up. So, it will fall through the supply zone. Once it falls through the supply zone, it might land up near the Demand zone or somewhere lower and continue up from there.

https://www.tradingview.com/x/iSwqD6Oi/

in the case of a demand turn supply

For a demand turn supply breaker block, apply the opposite of the logic above.

Let’s look at why this is an invalid breaker block. The clue here is the upward rejection. This rejection indicates that the sell orders that came could not overpower the buy orders in the demand zone. So, if sell orders were injected, price would’ve broken through the demand order block aggressively. It wouldn’t have given an upward micro pullback. Since it didn’t break through aggressively and instead gave an upward pullback, that shows that the buy orders were of a significant amount.

So, when price does break below the Demand order block, it won’t go lower because there are not enough sell orders in the Demand zone to push it lower. Instead, it will rise up.