I struggled with Orderblocks for over 2 years and I've noticed many of you are having the same issue. So I decided to create this simplified thread to help out.
A thread 🧵
A thread 🧵
An Orderblock (OB) can be described as an institutional candle usually seated on a support or resistance level and used by market makers to mitigate orders. Please take note that not all candles seated on S/R levels are OBs.
CLASSES OF ORDERBLOCKS
1. Bullish Orderblock: A bullish orderblock is the last down candle usually seated on a support level prior to a move up.
Characteristics of a Good Bullish OB:
a. The next candle that proceeds the OB usually closes above below it.
1. Bullish Orderblock: A bullish orderblock is the last down candle usually seated on a support level prior to a move up.
Characteristics of a Good Bullish OB:
a. The next candle that proceeds the OB usually closes above below it.
b. Price usually moves quickly away from that zone.
c. Its usually seated on a support level
d. There's usually presence of some form of imbalance usually a Fair Value Gap (GAP). Study these examples:
c. Its usually seated on a support level
d. There's usually presence of some form of imbalance usually a Fair Value Gap (GAP). Study these examples:
2. Bearish Orderblock: Bearish Orderblocks are usually described as the up candles seated on a resistance level prior to a drop down.
Characteristics of a Good Bearish OB
a. The next candle that proceeds the OB usually closes below it.
Characteristics of a Good Bearish OB
a. The next candle that proceeds the OB usually closes below it.
b. They're usually seated on resistance levels
c. Price has the tendency to move quickly away from that area
d. Presence of imbalance like an FVG
Study these examples:
c. Price has the tendency to move quickly away from that area
d. Presence of imbalance like an FVG
Study these examples:
Now, the big question is, "does this work in all financial markets?"
Yes, it does!
Question: Where should I place my TP and SL?
Your TP should be the nearest liquidity pool close to you. This could be the nearest high or low.
Your SL should be below the OB by few Pips.
Yes, it does!
Question: Where should I place my TP and SL?
Your TP should be the nearest liquidity pool close to you. This could be the nearest high or low.
Your SL should be below the OB by few Pips.
Study these examples:
ETH/USDT
ETH/USDT
US30
US30
BTC/USDT
And yes, it works on Currency pairs and Commodities like Gold and USOIL. I only dropped these examples as these are the few assets I trade.
This content was written primarily for your edification and I believe you learnt something here. Do well to retweet and follow if you haven't and join my Telegram channel where I post setups and trade ideas:
t.me
t.me
@CryptoDefiLord
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