Rejection Blocks: The Complete ICT and SMC Guide – Part 4

#Before Rejection Blocks: You Don’t Need to Master Every ICT Concept

One of the important points emphasized by the instructor at the beginning of this episode is not directly related to Rejection Blocks themselves, but it is highly relevant to learning how to trade: you do not need to incorporate every ICT and SMC concept into your strategy at the same time.

Order Blocks, Breaker Blocks, Mitigation Blocks, Rejection Blocks, and many other concepts are ultimately tools. A trader can choose the ones that best fit their own trading model.

The problem begins when you constantly jump from one concept to another. When this happens, you do not give yourself enough time to practice, observe price behavior, and develop a deeper understanding of a specific model.

The key takeaway is to choose a few concepts that suit your approach, focus on them, and give yourself enough time to develop real proficiency.

The instructor also emphasizes that technical concepts are only one part of trading. Psychology and the ability to consistently follow a defined trading model ultimately play a major role in a trader’s performance.

#What Is a Rejection Block?

In its simplest form, a Rejection Block can be identified around a candle located at an extreme of a price move, with a relatively long wick extending above or below it.

The main idea is that when price returns to the area, it may:

• Trade beyond the candle body;

• Enter the long wick;

• Fail to sweep the entire wick and its final high or low;

• Then move in the opposite direction.

For this reason, Rejection Blocks are more commonly found around the highs and lows of price movements. You are generally not looking for them on every candle that appears in the middle of the market structure.

#The Role of Long Wicks in a Rejection Block

A long wick is one of the main characteristics emphasized in this episode when identifying a Rejection Block.

Suppose price reaches a high and forms a candle with a long upper wick. After some time, price returns to the same area. This time, it may trade above the candle body and enter the wick, but fail to move beyond the end of that wick.

If price subsequently moves lower, that area may be considered a bearish Rejection Block.

The same logic applies in reverse at market lows. If a candle forms with a long lower wick, price may later return and trade below the candle body without breaking the lowest point of the wick, before beginning a bullish move.

#How the Candle Body and Wick Relate to Liquidity

An important part of understanding Rejection Blocks is the distinction the instructor makes between the body and the wick of a candle.

As explained in the video, particularly in CFD (Contract for Difference) markets, wick details can vary slightly between brokers because their price feeds may differ, while candle bodies tend to remain more consistent.

Within the framework discussed in this trading approach, the instructor gives greater importance to the candle body when tracking price behavior, while associating the wick more closely with liquidity-taking moves and the trapping of market participants.

In simple terms, price may sometimes move above the top of a candle body, creating the impression that a breakout has occurred. Breakout traders may enter long positions, while stop losses belonging to other traders may also be triggered. Instead of continuing higher, however, price may stop within the previous wick and reverse direction.

This type of behavior is one of the structures we look for when analyzing a Rejection Block.

#What Is a Bearish Rejection Block?

A Bearish Rejection Block generally forms near the upper extreme of a price move.

To identify one, you first look for a candle positioned around a market high with a significant upper wick.

#Bearish Rejection Block Structure

The general sequence can be described as follows:

1. Price reaches a high.

2. A candle with a long upper wick forms.

3. Price moves away from the area.

4. The market later returns toward the previous high.

5. The previous candle body is swept and price enters the wick.

6. The entire wick, or the previous High, is not broken.

7. Price rejects the area and begins moving lower.

In the example presented in the video, identifying this structure involves finding the highest candle within the relevant area—the candle whose Open or Close is positioned at the highest level. A long wick makes the setup more significant within the framework being discussed.

#Why Can This Trap Breakout Traders?

Suppose price returns to a previous high. Moving above the candle body may appear to some traders as confirmation of a bullish breakout.

They enter long positions, but instead of continuing higher, price trades only partway into the previous wick and then reverses.

In this situation, new buyers may become trapped in unfavorable positions while liquidity around the area is also taken.

#What Is a Bullish Rejection Block?

A Bullish Rejection Block follows the same logic in reverse at a market low.

In this case, the focus is on the lowest candle in the area, particularly when that candle has a long lower wick.

#Bullish Rejection Block Structure

The general sequence looks like this:

1. The market forms a low.

2. A candle with a long lower wick appears.

3. Price moves away from the low.

4. When price returns, it trades below the body of that candle.

5. Part of the wick is traded into, but the final Low is not broken.

6. Price rejects the area.

7. A bullish move begins.

In other words, price can sweep the candle body without having to move through the entire wick. It can then reverse from that area and move higher.

#Where Should You Look for Rejection Blocks on a Chart?

One of the practical points covered in this episode is that Rejection Blocks tend to be more significant at the external points of a price move.

This means you should generally pay closer attention to areas such as:

• Significant market highs

• Significant market lows

• Swing Highs

• Swing Lows

• Extremes of a price move

• Areas containing candles with long wicks

If you see a similar candle in the middle of a price move, the presence of a long wick alone does not automatically make it a valid or meaningful Rejection Block.

The candle you are interested in should generally be located toward the outer edge of the structure, near a high or low rather than somewhere in the middle of the move.

#The Relationship Between Rejection Blocks and Counter-Trend Moves

Another point discussed in this episode is how Rejection Blocks can behave during Counter-Trend moves.

For example, suppose the broader market trend is bearish, but price temporarily makes a bullish corrective move. Under these conditions, price does not necessarily have to sweep the entire previous wick when reacting to a Rejection Block.

In one of the examples shown in the video, a Bullish Rejection Block appears during a counter-trend move. Price sweeps the candle body but does not move below the end of the wick, and then continues higher.

It is worth examining this behavior on your own charts to determine whether it fits your trading model.

#The Difference Between Sweeping the Candle Body and Sweeping the Entire Wick

To properly understand Rejection Blocks, it is important to distinguish between two different situations.

#Sweeping the Candle Body

In this scenario, price moves beyond the candle’s Open or Close and enters the wick, but does not break the candle’s final High or Low.

This is the type of behavior emphasized in the Rejection Block examples covered in this episode.

#Sweeping the Entire Wick

If price moves through the entire wick and also breaks the previous High or Low, the structure on the chart is different from the Rejection Block examples discussed in this lesson.

Therefore, simply seeing price trade back into a previous area is not enough. You also need to examine how price behaves relative to the candle body and the end of its wick.

#A Simple Checklist for Identifying Rejection Blocks

To make chart practice easier, you can summarize the structure discussed in this episode with a simple checklist:

• Is the candle located near the high or low of the price move?

• Does it have a relatively long wick?

• Did price move away from the area after the candle formed?

• Was the candle body swept when price returned?

• Did price enter the wick without breaking its final High or Low?

• Did price show a clear reaction after entering the area?

• Does the structure make sense within the broader trend and current price location?

None of these factors should be treated as a standalone trade signal. The purpose of this checklist is simply to help you identify and practice the structure explained in the video more consistently on your charts.

#Don’t Overcomplicate Rejection Blocks

One of the main messages from the instructor toward the end of the episode is that the Rejection Block concept is not inherently complicated.

Instead of adding numerous rules, begin by practicing the basic model on historical charts. Identify highs and lows, look for candles with long wicks, and observe how price behaves relative to their bodies and wicks when it returns to those areas.

After reviewing enough examples, you will gradually become better at recognizing which types of Rejection Blocks are most relevant to your own trading model.

The goal is not to find a new concept to explain every market move. The goal is to study and practice a few specific structures until their behavior becomes easy for you to recognize.

#Summary: Rejection Blocks in ICT and SMC

A Rejection Block is a price structure that can be used to analyze reactions around market highs and lows. One of the key characteristics emphasized throughout this episode is the presence of a candle positioned at an extreme of a price move with a relatively long wick.

In a bearish Rejection Block, price may trade above the candle body and enter the upper wick, but reverse lower without completely sweeping the High. In a bullish Rejection Block, the same behavior occurs in reverse: price trades below the candle body and enters the lower wick, but moves higher without fully breaking the Low.

If you are learning ICT and Smart Money Concepts, it is better not to treat Rejection Blocks as an isolated concept to memorize. Instead, examine them alongside price location, liquidity, significant highs and lows, and the broader market direction. By reviewing numerous examples on real charts, you can develop a clearer understanding of how this structure appears and behaves in actual market conditions.