Breaker Entry Model

Introduction to the Breaker Entry Model

The Breaker Entry Model is a price action-based trading strategy often used by traders focusing on smart money concepts. This strategy takes advantage of market manipulation where liquidity is swept (stop-losses or pending orders), followed by a reversal and structural confirmation.

The “breaker” refers to a price zone that previously acted as a support or resistance but is broken and then retested to serve as an entry area. This model provides a low-risk, high-reward opportunity when executed correctly.

Chart Breakdown

1. Key Elements on the Chart:
   • LQ Sweep (Liquidity Sweep): Price sweeps below a recent low to collect liquidity.
   • Shift: A change in market structure showing the potential reversal direction.
   • BOS (Break of Structure): Confirms the new bullish or bearish trend.
   • Breaker Zone: The key level or zone where price retraces, offering an optimal entry point.
2. Sequence of Events:
   • The market sweeps liquidity (LQ Sweep) by breaking the low (for buy setups) or high (for sell setups).
   • A clear Shift in market structure occurs, signaling a reversal.
   • A Breaker Zone is formed (typically a demand zone for buys or a supply zone for sells).
   • The price retests the breaker zone, providing a high-probability entry.

Trade Setup Idea

1. Entry:
   • Wait for the market to return to the breaker zone after the BOS (Break of Structure).
   • Look for confirmation signals such as candlestick patterns (e.g., bullish/bearish engulfing, pin bars) within the breaker zone to enter.
2. Stop Loss:
   • Place your stop-loss just below the breaker zone for a buy setup or above it for a sell setup.
3. Take Profit:
   • Target the next significant structural level (e.g., previous highs/lows or liquidity zones).
   • Alternatively, use a fixed risk-to-reward ratio (e.g., 2R or 3R).
4. Confirmation:
   • Use higher timeframes to align your trade direction with the overall trend.
   • Combine this strategy with other confluences, such as Fibonacci retracements or volume analysis.

Why Use the Breaker Entry Model?

This model is highly effective for traders who understand the dynamics of liquidity and market structure. It allows you to trade alongside institutional moves while avoiding common retail trader traps.