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Everything you need to know about order block 5 RULES | TUTORIALToday we're going to talk about orderblocks. Very simply, an orderblock is the support and resistance of big players. It is stronger and more important than what you draw on a chart expecting a price reaction by classical technical analysis. This works absolutely everywhere in cryptocurrency, forex, and the stock market. I have deduced for myself 5 rules of confirmation, and now we will go over each of them. Let's start with schemes and end with an example on a chart. Orderblock is a candlestick that shows purchases or sales of large capital. When a bullish orderblock is formed, an accumulation or reaccumulation takes place in order to further markup the asset. When a bearish orderblock is formed, a short position is accumulated or reaccumulated. With the purpose of further asset markdown. The first rule is liquidity. We have a zone from which the price gets a reaction and goes in the opposite direction. This forms a support zone for those who trade classic technical analysis. Traders place their orders in this zone, which is what the big capital hunts for. Accordingly, this level is pierced by the flow of orders, which activates these stops. This is how liquidity is removed from the area. The last bearish full-body candle will be our orderblock. It is important that it updates past lows. An analogy would be the wicks of candle, which removes liquidity from past lows. The wick of a candle in this case is an orderblock on a lower TF. The second rule is confirmation After withdrawal of liquidity we expect confirmation of this orderblock - that is absorption and movement in the opposite direction. The confirmation should be impulsive. That is, we should not see how the price is stuck in this confirmation. It concerns the absorption (updating) of the order block. It is possible inside the candle (orderblock). But personally, I try to take the "book variant". Local consolidations can indicate the weakness of the movement. It doesn't mean that the orderblock will not work out in the end, but the probability decreases. The third rule is structure breaking (bos) One of the key points is the breakdown of structure that this orderblock provides. This is how we can understand the mood of the market and the intentions of big capital. In this example, we can highlight the main structure with the yellow line. It is after updating a significant structural element that we can be almost sure of the truth of our orderblock. If we don't see a break in structure, then this movement may just be a correction within a downtrend. So keep an eye on this one. The fourth rule is the law of force (momentum) After confirming our orderblock, we can see a prolonged correction in the OTE (make a Fibo). That is, we should see an impulse and after it a slow sluggish movement downwards, which will also form liquidity behind each local high. This is not a necessary factor, but if it is present, the probability of a trend reversal will increase many times over. The fifth rule - the volume and spread of candles The candlesticks should be full-bodied with increased volumes. It will be important to monitor the "distance" that the price has done. All these factors will also indicate the veracity of the movement. This recommendation concerns more about swing trading, moments when the price is in a trend for a long time without a serious correction and test of the formed order block. Examples on the chart On the daily TF I marked a Sell to Buy move. I marked it this way because there were no warrant blocks to satisfy me on the higher timeframe. This area will act as a zone of interest. The structure on the Hourly TF looks like this. Consequently, we expect a confirmation of our orderblock through a break of the structure. The price entered the sell to buy zone and tested the order block, which was formed from the wick of the candle. We saw an impulse exit and watch the price go up sluggishly, forming liquidity behind each low. Therefore, we expect an orderblock test. I recommend backtesting on chart history to better understand how order block works. Thank you for your attention, I hope it was useful
Education
by Patronofbargain
5
EURNZD CASE STUDY 1:60 RRLooking around on this past entry that I have analysed back then. POV: The analisys was right but I didin't took the entry. So first of all we were looking for possibles sells entry's on the Distribution structure formed, at the the end of September to October. Continuing with the market direction we see that price broke structure to the low and created a new LL on the daily (1D). We missed the first entry's before BOS (Break of Structure), but as we know, we always going to have another or better entry, if we missed the first one. The market is full of opportunities. What we see? Price went and retested a Weekly POI (Point of Interest) and then broke structure to the downside. 1º Confirm that price is going to do a correction 2º Look for possibles zones of supply or OB 3º Hold the trade if price brake a LL again Looking for our supply zone. If we zoom in on the ENTRY 2, we can see 2 possibilities for entries; the first one is the NULL ZONE, it has a OB that was partly mitigated. And the second zone is an OB+ IMBALANCE on a blue box, that was refine on the 5m TMF (Time Frame) Why did we choose this POI? The zone of supply lead to the BOS (Break of Structure), the second confluence is that is a OB on the 1D TMF
by BRWGTRADING
Game Of LiquidityHello traders -Today we will talk about liquidity and its role. What is liquidity? -We will try to explain you as simple as possible what liquidity is and what you should be looking for when you want to spot it. -There is a theory on the FX markets that the Big institutions (Smart money) are always trying to trap us and take our Stop losses. -Retail education as we all know is based on patterns (double top,double bottom, trendlines, supp res zones etc... -As new traders come fresh on the markets they can be easily manipulated and taken away from their money because they are 'easy pray for big boys. -If you want to understand liquidity as simple as possible - when there is a trend line, double top pattern, there are retail stop losses and there is liquidity to be taken. Example: 1) In this example, we see that the price is moving in a downtrend 2) Then the price slows down with momentum and starts to make a lot of liquidity. 3) We can see liquidity in the form of a trendline, double tops, etc. 4) A lot of retail traders lose their money here, while we patiently wait for our opportunity. 5) Our entry is at the strong supply zone, and the price reaches it when it picks up all SL of retail traders. 6) At the end, we see a liquidity sweep that mostly happens in one move, and here we open our position. -Remember: This is the cat and mouse game. In order for one person to win someone else needs to take the loss. So our question is Are you a cat or a mouse? -If this post helped you better understand the concept of liquidity, leave a like. If you have any questions, write below in the comments.
Education
by hybridtradingfx
1
EURUSD CASE STUDY 1:41 RRIn the first week of November we note that the price has previously made a new structure in the TMF of 1W and 1D, breaking the previous LH and creating a new HH. The first thing we note in before marking our zones of Interest we look for the following confluences: 1º BOS (Structure Breakout). 2º Small pullbacks and continuations. 3º Signs of weakness of the strong hands on sale. Taking into account our confluences, we can mark the zone of interest, the one where the price is more predictable to react with an upward movement, we can also call demand zones. Already in the first week of the new month we should align ourselves with the most important news, here comes in the NFP (Non Farm Payrolls), Interest Rates, Unemployment Rate and PMI Index, these are part of our analysis and play a big role in the macroeconomic system of each country. Moving closer to the demand zone, we mark an OB (Order Block + Imbalance) on the 15 min TMF (Time Frame). Here it is more predictable that the price will mitigate the pending orders and fill the imbalance created earlier. The price already approaching our zone, completely mitigates the OB + Imbalance and creates an accumulation zone before responding with the upward movement. For a more precise entry we decided to place our Pending Order between 100% of the OB and 0% imbalance, so as not to risk losing the trade. With the bullish reaction in our favor, we place our SL at Breakeven and our TP (Take Profit) above the HH. We can extend our TP even more, if we look at the weekly TMF. We get a 1:41 RR with a profit of +650 pips.
by BRWGTRADING
1