Smart money concepts · Advanced

Mitigation Blocks Explained

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Short answer

A mitigation block is the last opposing candle before an aggressive move away from a level, revisited later so that trapped positions from that original move can be "mitigated," or closed out, before price continues. When price moves sharply in one direction, some participants end up on the wrong side of that move — for example, sellers who entered just before a rally.

A mitigation block is the last opposing candle before an aggressive move away from a level, revisited later so that trapped positions from that original move can be "mitigated," or closed out, before price continues.

The Idea Behind Mitigation

When price moves sharply in one direction, some participants end up on the wrong side of that move — for example, sellers who entered just before a rally. Those positions remain open at a loss until price returns to roughly where they were entered, giving traders a chance to exit at breakeven or a smaller loss. That return visit is what mitigation traders are anticipating.

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