Introduction to Orderblocks
In this thread, I am going to show you simple steps on how to trade Order Block (OB) Strategies.
▶️The Thread/1
In this thread, I am going to show you simple steps on how to trade Order Block (OB) Strategies.
▶️The Thread/1
Using order blocks is all about understanding the story behind price and why order blocks exist. as we all know, market activity is as a result of Supply and Demand.
When demand is greater than supply, prices rise, and when supply is greater than demand, prices fall. /2
When demand is greater than supply, prices rise, and when supply is greater than demand, prices fall. /2
What is an Order Block (OB)
Order blocks (OB) are areas where Institutions are either buying/selling from, these blocks are formed prior to a large impulse to an already pre-planned direction.
Order blocks are the footprint of Institutional traders;
Supply & Demand Footprints /3
Order blocks (OB) are areas where Institutions are either buying/selling from, these blocks are formed prior to a large impulse to an already pre-planned direction.
Order blocks are the footprint of Institutional traders;
Supply & Demand Footprints /3
The reason we trade order blocks is because for the institutions to make a move they need to grab liquidity first, this is from retail traders stop losses, where many retail traders call it 'stop hunts'. /4
Have you heard about Wyckoff Schematics, it helps to explain how market manipulation is done and how liquidity is engineered by institutional traders.
Understanding Supply and Demand and how grab of liquidity/Liquidity is engineered, will help reduce the rate of stop hunts. /5
Understanding Supply and Demand and how grab of liquidity/Liquidity is engineered, will help reduce the rate of stop hunts. /5
So institutions drive price to grab liquidity before creating their desired move. Institutions do not use Stop losses, which means although they have moved the market how they would like, they still have a trade going the opposite way in heavy drawdown. /6
So they drive price back down to mitigate their orders then continue the move. /7
How to Trade Using Orderblocks
Determine the present position and probable future trend of the market.
Is the market consolidating or trending? Does your analysis of market structure, supply and demand indicate the direction that is likely in the near future? /8
Determine the present position and probable future trend of the market.
Is the market consolidating or trending? Does your analysis of market structure, supply and demand indicate the direction that is likely in the near future? /8
This assessment should help you decide whether to be in the market at all and, if so, whether to take long or short positions. /9
I focus more on the Lows (L) during up-trends than on the Highs(H) as I look to observe a change in the market structure (CHoCH). /10
We have 2 types of OB:
1). Bullish OBs
2.) Bearish OBs
BULLISH OBs:
This is the supposed down candlestick before the UP move that broke Market Structure(MS).
BEARISH OBs:
This is the supposed Up candlestick before the DOWN move that broke Market Structure(MS). /11
1). Bullish OBs
2.) Bearish OBs
BULLISH OBs:
This is the supposed down candlestick before the UP move that broke Market Structure(MS).
BEARISH OBs:
This is the supposed Up candlestick before the DOWN move that broke Market Structure(MS). /11
Adding Confluence to the OB:
Adding confluence to the OB strategy can increase the chances of being profitable.
I pick my OBs around HTF Support & Resistance zones..
Also, I use Support/Resistance and Previous Swings areas for targets while I trail my profit. /12
Adding confluence to the OB strategy can increase the chances of being profitable.
I pick my OBs around HTF Support & Resistance zones..
Also, I use Support/Resistance and Previous Swings areas for targets while I trail my profit. /12
I execute a Limit Order at the 0.5/0.618 Fib levels of the OB.
Or wait for price rejection at the OB before executing. /13
Or wait for price rejection at the OB before executing. /13
The Summary on Chart /14
I've a simple video on this...
Check my bio and Join my FREE monthly Livestream.
I've a simple video on this...
Check my bio and Join my FREE monthly Livestream.
Loading suggestions...