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Order blocks (OB) are areas where Institutions are either buying or selling from, these blocks are
formed prior to a large impulse to an already pre-planned direction. 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'. So institutions drive
price to grab this 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. So they drive price back down to mitigate their orders then
continue the move. This is where we come in with our strategy. We look to enter at this
mitigation and follow price with them.
This strategy is not overly difficult however requires practice to understand how OBs work.
1. Look at overall market structure ( Higher Highs and Higher Lows or Lower Highs and
Lower Lows. Bearish or Bullish ).
2. Look for supply or Demand zones according to the higher timeframe trend ( So if the
higher timeframe trend is a down trend then you would look for supply zones and if you
are in a bullish market then you would demand zones.
3. Look at the lower time frames and look for the lower time frame confirmations ( this can
be in the form of reaction to the 4 Hour order block or it can be order blocks forming on
the lower time frames inside the higher time POI(Point Of Interest).
EXAMPLE 1
KEYWORDS:
SH - STOP HUNT/MANIPULATION
WYCKOFF SCHEMATICS(ADVANCED)
SELF- STUDY ABOUT WYCKOFF :
https://school.stockcharts.com/doku.php?id=market_analysis:the_wyckoff_method
DISCOUNTED PRICE
In this section we are going to look at PREMIUM PRICE AND DISCOUNTED PRICE using the
fibonacci to help identify which ODER BLOCKS will most likely hold when looking for significant
levels or areas of interest. Our level of interest on the fibonacci is the 50% level.
Looking at the diagram above, we can clearly see that we have two order blocks paired with
some imbalances clearly showing that the banks/ market maker was involved in this big move
to the upside...Now we need to identify which order block will hold.
Looking at the behavior of the candles shows that price is currently respecting that area. We can
now make an entry.
DONT FORGET TO BACK TEST THEN FORWARD TEST BEFORE INVESTING MONEY IN THIS...ON
AVERAGE IT HAS A 68% WIN RATE. WHICH SHOULD DEFINITELY MAKE YOU PROFITABLE OVER