HOW TO IDENTIFY ORDER BLOCKS
Hello traders! Today we are going to look at the pattern Order Blocks, what this pattern means and how to trade it.
✳️ What is Order Block?
The largest (from open to close) closest bearish candle to support before a strong impulsive bullish move (last sell candle before the buy candle). The last falling candle before the impulse growth. The high of this candle must be broken by the next candle to confirm it is an order block.
The largest (from open to close) closest bullish candle to resistance before a strong impulsive bearish move (the last buy candle before the sell candle). The last rising candle before the impulsive decline. The low of this candlestick must be broken by the next candlestick to confirm that it is an order block. Order blocks are those areas/zones where financial institutions have manipulated the price and where some of their orders are in drawdown. This "footprint" they are leaving is clearly visible in the order block. Price will usually return to these areas and we will react to this in some way. Order block is a sign of big players in the market.
✳️ The idea behind the pattern and why it works
The movements triggered by big players leave open positions which must be closed. And in order to do that, the price has to test those levels.
Smart money works according to certain algorithms, and we are trying to make money on this. Behind these candlesticks are financial institutions: they deliberately move the market, themselves falling into a drawdown, so they need to return the price to the order block with an imbalance, to reduce losses (to return their open positions to breakeven levels).
Why not close manipulative positions earlier? There is no one to cover them.
When we close large positions, the price automatically moves in the direction of the order block, and it is convenient for the large capital to close the previous manipulated positions, which causes a bounce which we want to jump into. In other words, we find a liquidity gathering point and wait for the return to it.
Order Block is a level to enter or exit.
✳️ Order Block Trading Strategy
Mitigation is a test of a supply/demand area. In our case a block of orders. Closing of old manipulative positions.
1) We are looking for a block of orders.
2) Were the stops pulled out (collecting liquidity, breaking through the obvious highs and lows)? If no, then it is not an order block, let it go. You are not sure? Do not enter.
3) If yes, we consider entering.
A bullish block of orders:
We enter - on price returning to this candle (at least to the high).
Stop - for low.
Take - the nearest level.
A bearish block of orders:
Entry - on the return of the price to this candle (at least to the low).
Stop - behind the high.
Take - the nearest level.
Each Order block can be tested only once.
✳️ What is Order Block?
The largest (from open to close) closest bearish candle to support before a strong impulsive bullish move (last sell candle before the buy candle). The last falling candle before the impulse growth. The high of this candle must be broken by the next candle to confirm it is an order block.
The largest (from open to close) closest bullish candle to resistance before a strong impulsive bearish move (the last buy candle before the sell candle). The last rising candle before the impulsive decline. The low of this candlestick must be broken by the next candlestick to confirm that it is an order block. Order blocks are those areas/zones where financial institutions have manipulated the price and where some of their orders are in drawdown. This "footprint" they are leaving is clearly visible in the order block. Price will usually return to these areas and we will react to this in some way. Order block is a sign of big players in the market.
✳️ The idea behind the pattern and why it works
The movements triggered by big players leave open positions which must be closed. And in order to do that, the price has to test those levels.
Smart money works according to certain algorithms, and we are trying to make money on this. Behind these candlesticks are financial institutions: they deliberately move the market, themselves falling into a drawdown, so they need to return the price to the order block with an imbalance, to reduce losses (to return their open positions to breakeven levels).
Why not close manipulative positions earlier? There is no one to cover them.
When we close large positions, the price automatically moves in the direction of the order block, and it is convenient for the large capital to close the previous manipulated positions, which causes a bounce which we want to jump into. In other words, we find a liquidity gathering point and wait for the return to it.
Order Block is a level to enter or exit.
✳️ Order Block Trading Strategy
Mitigation is a test of a supply/demand area. In our case a block of orders. Closing of old manipulative positions.
1) We are looking for a block of orders.
2) Were the stops pulled out (collecting liquidity, breaking through the obvious highs and lows)? If no, then it is not an order block, let it go. You are not sure? Do not enter.
3) If yes, we consider entering.
A bullish block of orders:
We enter - on price returning to this candle (at least to the high).
Stop - for low.
Take - the nearest level.
A bearish block of orders:
Entry - on the return of the price to this candle (at least to the low).
Stop - behind the high.
Take - the nearest level.
Each Order block can be tested only once.
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🔻FREE Telegram channel🔻
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🔻Contact for Paid SIGNALS🔻
t.me/DeGRAMForex
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