What is a Mitigation Block?
💡 Definition
A Mitigation Block (or Mitigation Zone) is a specific price area where Smart Money previously left imbalanced orders that need to be "mitigated" or rebalanced. When price returns to these zones, institutions fill their remaining orders, causing strong reactions. Mitigation blocks represent unfinished institutional business that price must revisit before continuing in the intended direction.
In Smart Money Concepts (SMC), mitigation blocks are critical supply and demand zones where institutional orders await execution. Unlike regular support and resistance, mitigation blocks have a specific narrative: Smart Money moved price aggressively away from these zones, leaving unfilled orders behind. When price returns, these orders get filled (mitigated), often causing powerful reversals or continuations.
Visual Representation
Bullish Mitigation Block Example
Price aggressively leaves a zone (creating imbalance), then returns later to fill remaining orders (mitigation)
Types of Mitigation Blocks
🟢 Bullish Mitigation Block
Formation: Created by the last bearish candle(s) before a strong bullish impulse move
Location: Found in downtrends or retracements before bullish reversals
Expectation: When price returns, expect bullish reactions as buy orders get filled
Use Case: Entry zones for long positions in bullish market structure
🔴 Bearish Mitigation Block
Formation: Created by the last bullish candle(s) before a strong bearish impulse move
Location: Found in uptrends or retracements before bearish reversals
Expectation: When price returns, expect bearish reactions as sell orders get filled
Use Case: Entry zones for short positions in bearish market structure
How Mitigation Blocks Form
The Creation Process
Step 1: Smart Money Enters Aggressively
Institutions begin entering positions in a specific zone, but their order size is too large to fill completely without moving price significantly.
Step 2: Impulse Move Creates Imbalance
Price moves explosively away from the entry zone, leaving many institutional orders unfilled. This creates an "imbalance" - unfinished business that needs resolution.
Step 3: The Zone Becomes a Mitigation Block
The candle(s) immediately before the impulse move represent the mitigation block. Smart Money's remaining limit orders sit in this zone waiting to be filled.
Step 4: Price Returns to Mitigate
Eventually, price retraces back to the mitigation block. This isn't random - it's purposeful. Smart Money needs to fill their remaining orders.
Step 5: Orders Get Filled and Price Reacts
When price touches the mitigation block, the waiting orders get executed (mitigated). This creates buying or selling pressure that pushes price away from the zone, often strongly.
Step 6: The Block is "Mitigated"
Once orders are filled, the block loses its power. It has been "mitigated" and is no longer a high-probability reaction zone. The imbalance has been resolved.
Common Mitigation Scenarios
When and Where Mitigation Occurs
📈 Trend Continuation Mitigation
In a strong uptrend, price makes an impulse move up, then pulls back to a bullish mitigation block before continuing higher. This is the "buy the dip" scenario Smart Money uses.
🔄 Reversal Mitigation
After a trend change (marked by BOS or CHoCH), price returns to mitigate the last opposing block before moving strongly in the new direction. This validates the reversal.
⚡ Multiple Timeframe Mitigation
Higher timeframe mitigation blocks often contain multiple lower timeframe blocks. Price may react at lower TF blocks within the larger HTF mitigation zone.
🎯 Nested Mitigation
Sometimes a mitigation block contains another smaller mitigation block within it. The inner block often provides the most precise entry point.
🌊 Multi-Touch Mitigation
Strong mitigation blocks may take several touches to fully mitigate all orders. Each touch weakens the block until it's completely exhausted and stops reacting.
💥 Immediate Mitigation
Sometimes price creates a mitigation block and returns to it within just a few candles. These "fresh" blocks often produce the strongest reactions.
Mitigation Block vs Order Block
Understanding the Difference
Mitigation blocks and Order Blocks are closely related but have important distinctions:
Mitigation Block
- Focus on "imbalance" that needs fixing
- Last candle(s) before impulse move
- Orders left behind need filling
- Temporary - gets "used up" after mitigation
- Price must return to resolve imbalance
- More specific timing expectation
Order Block
- Focus on institutional order placement
- Can be multiple candles in a zone
- Where Smart Money placed orders
- Can work multiple times
- Price may or may not return
- Broader concept of supply/demand
In Practice: All mitigation blocks are order blocks, but not all order blocks are mitigation blocks. Mitigation blocks specifically refer to zones with unfinished business (imbalance) that price is likely to revisit. Think of mitigation blocks as "priority order blocks" with a specific narrative.
How to Identify Valid Mitigation Blocks
- Preceded by Strong Impulse: Valid mitigation blocks create explosive moves away from them - look for large candles with minimal wicks
- Last Opposing Candle: The mitigation block is the final candle(s) of opposite color before the impulse - last red before bullish impulse, last green before bearish impulse
- Creates Imbalance/Gap: The impulse often leaves a fair value gap (FVG) or clear imbalance showing orders were left behind
- Aligns with Structure: Best mitigation blocks align with market structure - after BOS for continuation or after CHoCH for reversals
- Higher Timeframe Confirmation: Most reliable when the mitigation block appears on higher timeframes (4H, Daily) or aligns with HTF structure
- Volume Profile: Genuine mitigation blocks often show high volume on the impulse candle, indicating strong institutional participation
- Clean Candle Bodies: Look for clean candle bodies without excessive wicking - shows decisive institutional action
- Not Yet Touched: The most powerful mitigation blocks are "unmitigated" - price hasn't returned to them yet since their creation
Trading Mitigation Blocks
Entry Strategy and Execution
Pre-Trade Analysis:
✦ Identify mitigation blocks on higher timeframes (4H, Daily)
✦ Mark the exact range of the last opposing candle before impulse
✦ Verify the block aligns with current market structure direction
✦ Note any confluences: FVG, liquidity pools, round numbers
✦ Check if block is fresh (untouched) or has been tested before
🔑 Entry Styles
Limit Entry: Set a pending order at the block open or at 50% of the block (the "mean threshold"). Best when the block is fresh and trend is strong.
Confirmation Entry: Wait for a lower‑TF trigger inside the block (e.g., CHoCH/BOS, engulfing, liquidity sweep + break). Reduces false starts but may reduce RR.
🛡️ Stop Loss Placement
Place SL a few ticks/pips beyond the block extremes or beyond the wick that created it. Add buffer for the instrument’s volatility (e.g., ATR(14) × 0.3–0.6).
🎯 Targets
First take‑profit at recent opposing liquidity (equal highs/lows), FVG edge, or 1R–2R. Leave runner to HTF objectives (swing high/low, major liquidity pool).
⚙️ Management
Scale in on refined LTF blocks within the HTF block. Move to breakeven after 1R or after LTF structure shift in your favor. Trail behind new LTF swing points.
🧩 Confluences
• HTF bias (BOS/CHoCH) • Fair Value Gap overlap • Liquidity sweep into block • Session timing (e.g., London/NY) • Round numbers/previous day highs & lows.
🚫 Invalidation
Block is considered mitigated/invalid if price closes decisively through it on the HTF that defined it, or if multiple clean mitigations occur and reactions weaken.
Common Mistakes & Risk Notes
Avoid These Traps
- Trading every block you see—filter by HTF structure and confluence.
- Ignoring liquidity: entries just before obvious equal highs/lows often get swept.
- Using tight stops on volatile pairs or during high‑impact news.
- Assuming a tapped block will always work again—freshness matters.
- Forcing trades outside your session or without a clear narrative.
Risk Management:
Risk a fixed fraction per idea (e.g., 0.25%–1%). Accept missed trades—chasing usually turns a good model into a bad outcome.
Backtesting & Journaling Checklist
- Was there a clear HTF bias (BOS/CHoCH)?
- Did the block directly precede an impulsive move that left imbalance/FVG?
- How fresh was the block? (0, 1, 2+ prior taps)
- What confluences were present (FVG, liquidity sweep, session, round numbers)?
- Which entry style was used (limit vs confirmation) and why?
- Exact SL logic and buffer used (in ticks/pips or ATR fraction)
- Objective(s) for TP and whether price reached them efficiently
- Did price close through/mitigate the block? How did reactions evolve?
- Screenshot before/after + annotate narrative (2–3 sentences)
Quick FAQs
Is a mitigation block the same as a fair value gap (FVG)?
No. An FVG is an inefficiency in the candle sequence; a mitigation block is the last opposing candle zone before an impulse. They often align, but they are different tools.
Which timeframe should I mark the block on?
Define the narrative on HTF (H4/D/W). Execute on LTF (M5–M15) for precision. The HTF that created the block is the one you should respect for validation/invalidations.
What if price front‑runs the block?
That’s common when liquidity sits above/below. Wait for a clear LTF shift or refine to an inner block. If not triggered by rules, let it go.
How many touches are too many?
After 2–3 clean mitigations, reaction quality typically degrades. Treat further taps with caution or avoid them.