The first rule to identify a bearish breaker block is the formation of a swing high. A swing high occurs when the price reaches a peak and then reverses direction, typically indicating a temporary resistance level. In the context of the bearish breaker block, this swing high will act as a reference point for subsequent price action.

After the formation of a swing high, the price must then create a swing low. A swing low represents a temporary price trough and serves as a support level for future price action. This swing low is essential for the bearish breaker block, as it sets the stage for the next steps in the process.

Following the swing low, the price must make a higher high, indicating that more buyers have entered the market. This higher high occurs when buy stops are triggered, driving the price above the previous swing high. This surge in buying activity suggests a bullish sentiment in the market, but it's important to remember that the overall context of the bearish breaker block strategy is to identify a potential reversal to the downside.

After the higher high is formed, the market should experience a reversal where sell stops are triggered. This causes the price to drop and run below the previous swing low. This rule is crucial, as it confirms that the bullish sentiment was temporary and that selling pressure is now dominating the market.

The breaker is defined as the last down close or consecutive down close candles in the swing low. This is the area where trapped long positions and increased selling pressure converge, making it a high-probability zone for short entries.

As the price returns to the breaker level, trapped longs will attempt to exit their positions at breakeven or with minimal losses. This return to the breaker presents an opportunity for interbank traders and other market participants to mitigate their long positions and add to their short positions, as they anticipate a further decline in price.

This final rule highlights the role of interbank traders in the bearish breaker block strategy. As the price returns to the breaker, these traders will take advantage of the trapped longs and use this opportunity to offload their long positions and increase their short exposure. As a result, the market will reprice lower, confirming the bearish sentiment and providing a high-probability short entry for traders employing the bearish breaker block strategy.