Mitigation Block

What Is a Mitigation Block

A Mitigation Block is a zone where institutions return to close (mitigate) positions that were left at a loss after a Change of Character (CHoCH). When Smart Money reverses direction, it needs to revisit the zones where it accumulated opposing positions in order to close them before continuing.

How to Identify It

1. Identify a clear CHoCH or trend reversal.
2. Locate the last Order Block from the previous trend that generated the move which was reversed.
3. That zone is the Mitigation Block: Smart Money will return to it to close the positions that were left trapped.
4. It is typically found at the point where institutions originally entered before the trend changed.

How to Use It in Trading

• After a CHoCH, wait for price to return to the Mitigation Block as an entry zone.
• The reaction at a Mitigation Block tends to be swift and decisive: enter with precision.
• Place your stop loss beyond the Mitigation Block (with a small buffer).
• The Mitigation Block is especially effective when it aligns with a Premium or Discount zone relative to the new trend.

Key Takeaway

The concept behind the Mitigation Block is that institutions cannot simply abandon large positions. They need to return to those zones to unwind them in an orderly fashion, and that return creates a predictable trading opportunity.