Mitigation Blocks Simplified - ICT Concepts

Summary

This video delves into the concept of mitigation blocks in trading, contrasting them with breaker blocks and demonstrating their application on various charts. The presenter highlights the conditions under which mitigation blocks are more effective, such as when aligned with smart money reversals or market maker models. Through examples on different financial instruments, the video illustrates how to identify and use mitigation blocks for potential trading opportunities, emphasizing the importance of reaccumulation and confluence with other technical analysis tools.

Takeaways

• 📈 A mitigation block is a trading concept used to identify potential reversal points in the market, differing from a breaker block in the sequence of highs and lows.
• 🔍 The speaker discusses the importance of identifying the 'smart money reversal' and how it relates to the formation of mitigation blocks.
• 📊 Examples on charts are provided to illustrate how to spot and utilize mitigation blocks, emphasizing the use of 60-minute and 5-minute charts for detailed analysis.
• 💡 The script highlights the significance of 'fair value gaps' in conjunction with mitigation blocks to identify high-probability trading opportunities.
• 🚫 The speaker expresses a personal preference against trading mitigation blocks that create multiple failure swings without sweeping highs, as they may lack strong directional momentum.
• ✅ A scenario is presented where the speaker would consider trading mitigation blocks: when there is a simultaneous 'smart money target' (SMT) at the low, indicating a potential reversal.
• 🔄 The concept of 'market maker models' is introduced, explaining how mitigation blocks can be used on the sell side of the curve for order blocks and then on the buy side for reaccumulation.
• 📝 The process of 'spotting and dragging out' mitigation blocks is detailed, showing how to use past order blocks to predict future price reactions.
• 📉 The video script includes a variety of examples across different financial instruments, such as gold and oil, to demonstrate the application of mitigation blocks in different market conditions.
• 📌 The importance of respecting previous highs (PD arrays) within mitigation blocks is emphasized, as violations of these levels can signal potential entry points for trades.
• 📚 The speaker concludes by summarizing the key points and encouraging viewers to apply the concepts of mitigation blocks to enhance their trading strategies.

Q & A

What is the main topic of the video?

The main topic of the video is about mitigation blocks and their application in trading, specifically in the context of smart money reversals and market maker models.

What is the difference between a mitigation block and a breaker block?

A mitigation block is identified by a high, a lower low, and then a lower high, whereas a breaker block is identified by a low, a higher high, and then a lower low.

How does the speaker identify a high probability mitigation block in the GU 60-minute chart example?

The speaker identifies a high probability mitigation block by looking for a lower low that overlaps with a fair value gap.

Why does the speaker generally not prefer to trade mitigation blocks?

The speaker does not prefer to trade mitigation blocks when they only create failure swings at the highs without sweeping any highs, as it can lead to less reliable trading opportunities.

Under what condition does the speaker consider trading mitigation blocks?

The speaker considers trading mitigation blocks when there is a smart money trigger (SMT) at the low, indicating a potential reversal point with more confidence.

What is an SMT and how does it relate to trading mitigation blocks?

An SMT, or Smart Money Trigger, is a condition where another instrument has made a higher high relative to a certain high, providing a context for more confidence in the mitigation block holding as a reversal point.

How are mitigation blocks used within market maker models?

In market maker models, mitigation blocks are used on the sell side of the curve to create order blocks, which can then be used on the buy side of the curve after a higher time frame level shift structure and smart money reversal.

What is the significance of a fair value gap in the context of mitigation blocks?

A fair value gap is significant as it can act as a point of interest for potential reaccumulation or reaction when price returns to the area of the mitigation block.

How does the speaker use old order blocks in the context of a smart money reversal?

The speaker uses old order blocks by identifying up-close candles into important levels before making a new low, then dragging these blocks over to the sell side of the curve to look for reactions and potential reaccumulation.

Can mitigation blocks be used on different time frames?

Yes, mitigation blocks can be used on different time frames, as demonstrated in the video with examples ranging from 5-minute to daily charts.

What is the final example in the video about?

The final example in the video is about using mitigation blocks on an oil daily chart, demonstrating how to identify and use old order blocks on the buy side of the curve and how they can provide additional confluence for trading decisions.