Institutions do not always enter perfectly. Sometimes they get filled at a worse price than they wanted. When price moves back to that bad entry zone later, they take the opportunity to break even on the underwater portion. That is the mitigation. The zone where it happens is the mitigation block.
Mitigation blocks tend to mark launch points for the next move in the original direction. The institutional cleanup is finished, the position is now properly sized at a better average, and the trend resumes.
Institutions accumulated long but some fills were higher than ideal. Price ran up, then pulled back to where the bad fills sit. They sell that portion at break even, taking risk off the table. Then they let the rest run higher.
For the trader, the bullish mitigation block is a long entry on the pullback to the zone. Trend resumes after the cleanup.
Institutions distributed short but some fills were lower than ideal. Price dropped, then bounced back to where the bad fills sit. They cover that portion at break even. Then they let the rest run lower.
For the trader, the bearish mitigation block is a short entry on the bounce to the zone. Trend resumes after the cleanup.
I wait for price to enter the mitigation zone. Reversal candle inside. Wick rejection. Smaller timeframe structure shift in the trend direction. Enter on confirmation, not on touch.
Stop beyond the mitigation zone in the opposite direction. If price continues through, the cleanup hypothesis was wrong. The original trend may be ending instead of continuing.
Next major level in the trend direction. Prior swing high for a bullish mitigation. Prior swing low for a bearish one. Mitigation block trades often extend beyond the previous swing because the institutional position is now properly sized for the bigger move.
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