Order Blocks Simplified (Full Trading Strategy)
2 min read
6 months ago
Published on Apr 22, 2024
This response is partially generated with the help of AI. It may contain inaccuracies.
Table of Contents
Step-by-Step Tutorial: Trading Order Blocks Simplified
Step 1: Understanding Order Blocks
- An order block is an area of price where there are large resting orders waiting to be triggered.
- When price trades into these areas, reactions are expected from the order blocks.
Step 2: Identifying Order Blocks
- Look for areas with a large volume kick into the market, identified by aggressive candles in one direction.
- For a bullish order block, look for a sell to buy candle followed by an aggressive move.
- The order block should have a fair value gap, indicating an area of imbalance.
Step 3: Selecting High Probability Order Blocks
- Ensure you are trading in the direction of the trend to increase the likelihood of success.
- Wait for a run on liquidity from the sell to buy level before the order block is formed.
- The order block should lead to a break of structure in the price leg.
Step 4: Applying the Strategy
- Identify the directional bias and the trend direction for your trading.
- Find a clear point of interest where an order block is likely to form, such as a session range.
- Look for fair value gaps in candles to identify high probability order blocks.
Step 5: Executing the Trade
- Determine your entry and stop-loss levels based on the identified order block.
- Ensure the order block aligns with the overall trend and break of structure.
- Monitor price action for confirmation and adjust your trade accordingly.
Step 6: Managing the Trade
- Consider adding positions if the trade continues to align with the trend.
- Set appropriate targets based on risk-reward ratios and market conditions.
- Stay vigilant for any changes in price action that may affect your trade.
By following these steps and applying the order block trading strategy outlined in the video, you can increase your chances of successful trading based on high probability setups. Remember to always trade responsibly and adjust your strategy as needed based on market conditions.