Order Blocks Explained — Step-by-Step Guide & Transcript

[00:02] have to know their intention. You have to be able to spot their footprints. Just like elephants, smart money tend to leave their footprints in the jungle of the market. And order blocks is that. An

[00:18] order block is basically a clue. A clue that large order flow has entered into that large order flow has entered into the market causing displacement and left behind an area which may later respect. And if you know how to identify the

[00:32] right order blocks, they can become some of the most cleanest areas you have on the chart. Quite simply put, you will be able to know when's the next time the smart money is stepping into the market again causing price to move up or down

[00:45] very aggressively and you will be able to capture that huge imbalance move because when you are trading at an order block, a valid order block, you're essentially positioning yourself to be able to capture that huge move.

[00:59] You're able to be there at the right place at the right time to capitalize on the luck. Okay, so when you guys see me catch sniper entries, it's not because I got lucky. It's because I position myself at the right place to capitalize

[01:17] on the luck. Get it? Right, luck is equal preparation meets opportunity. And this is where you are able to do your preparation by identifying these order blocks. So, in this lesson, I want to break down order

[01:30] blocks. Order blocks is such a important concept but like it's also one of those very misunderstood concepts in So, if you can understand how to identify them properly, they can give

[01:44] you very precise areas of interest for entries, reactions, and continuations.

[01:56] Order Order block, to put it in English, it's basically an area where large number of buy or sell orders are executed. So, it's like supply and demand zones, but like an overpowered version of

[02:10] supply and demand zones. So, for example, if there's a bullish auto block just like this, this tell us that at this price point, there was a lot of buy orders that was executed. There was a bulk of buy orders that was

[02:25] executed by the smart money, by the big banks. And this means that price is most likely going to gravitate towards that area for the big banks to fill up the remaining orders before price continue going up. Once again,

[02:40] tying to the concept of imbalance to balance to imbalance to balance. An auto block is basically the origin point of the imbalance. the past few lessons, right? The concept of imbalance, the concept of

[02:54] inefficiency, the concept of fair value gap. And we also discuss how the market move from phases of imbalance to balance to imbalance to balance. Now, auto block, what it does is that it allows you to know where is the starting

[03:07] >> [snorts] >> So, you can expect price to come back to the starting point before continue going up. And that's where you want to get in usually, right? Right before price move to the upside.

[03:23] So, let's break it down step by step. In a bullish scenario just like this, a bullish scenario just like this, it is often the last bearish candlestick before the expansion to the upside. And then in a bearish scenario just like

[03:38] this, it's usually the last bullish candlestick before price move very aggressively to the downside. So, I personally, I don't really care about whether this is a bullish candle

[03:50] or a bearish candle, even though that's what like textbooks tell me to do so. I just want to find a candlestick that is right before the imbalance move. The candlestick that is right before the huge move to the downside or to the

[04:03] upside. Yeah, so to keep things very simple, it's basically the last candle before the strong impulsive move that causes displacement and later on led to a break of structure.

[04:19] the reason why an order block is meaningful is not because it is the last imbalance move. It is meaningful because of what happens right after it. Okay, you can see it right after it, it creates what? A

[04:34] imbalance. So, this is something that we talked about in the previous lesson, gap, which tell us that the price has moved up so aggressively, the price has moved up so aggressively, so fast, so far that it has no choice

[04:48] but to leave a gap behind. Telling us that at some point of time in back to fill up this imbalance before moving up even further. So, later we're going to talk about how to combine the fair value gap plus order block to

[05:02] create like a very formidable trading strategy. But for now, you can start to coming together like different pieces of the puzzle itself. understand the logic behind order blocks. Don't just memorize this stuff.

[05:18] blocks. An order block is pretty much the area where smart money has entered in the past and it's most likely going to enter

[05:30] Okay, so it's the area where you can spot the smart money footprints. Like that is basically them telling you, "Hey, I just entered for a billion the next time price comes back to this price point again, I'm going to enter

[05:44] for another billion dollars worth of buy orders causing price to go up. not what they would say. That's not the exact words, but you get my point, right? It's basically the area where institutions are very, very interested

[05:58] in. So, how you identify order blocks is by steps. bullish scenario, you must understand that the reversal

[06:12] you must understand that the reversal candle or the pivot candle that must take out the previous candlestick low. mechanical rule you can put in your system to ensure that you're identifying

[06:26] the valid order blocks. So, as much as possible, we want the pivot candle, the reversal candle to take out the previous candlestick low. So, in this case, you can see this candle took out the previous candlestick

[06:39] low, which is situated right here. And then, the next thing we want to see is some form of gap or balance being created because this signals institutional intent. This literally tell us that smart money has entered for

[06:54] a bulk, a large amount of buy orders at this price point. That's what created this imbalance, right? So, that is the footprint that they have left behind. And then, we need to have a sharp and substantial upward movement. It cannot

[07:07] be slow. It cannot be a little bit. It needs to be sharp. It needs to be obvious. Ideally, we have like a V-shape reaction just like this. And then, after that is formed, this is

[07:21] where we can identify the pivot candle that led to the imbalance. And that is where you can draw your order block, right? You just mark up the high and the low of the candle, the origin candle, the pivot candle, the reversal candle

[07:36] this. And then, we have your order block. So, yeah. Order block is formed at the last bearish candle before a sharp upward movement. So, in this case, we are expecting price

[07:49] to pull back to the order block, mitigate the remaining uh mitigate this zone right here, fill up the remaining buy orders before price continue back So, in a bearish scenario, it's the exact same thing but in the opposite.

[08:01] Right? This time the pivot candle must take out the previous candlestick high. Okay, so in this case, this candle, the reversal candle, must be above the previous candlestick high for us to actually draw order block.

[08:15] And then, once again, must create an imbalance to the downside like a bearish fair value gap, just like this. Okay? Fair value gap must be present in order for us to identify order block. No imbalance, no fair value gap, no

[08:27] inefficiency, no fair value gap. As simple as that. And then it leads to a sharp and substantial downward movement, and then bearish order block for price to continue

[08:39] continue down even further. right now is, "Cool, Brett. Like, this all sounds interesting and easy to understand, but what's the difference between order block and supply and

[08:54] demand zones?" To be honest, it's the same thing. Okay? and demand zones, they are pretty much the same thing. Just two differences. Number one is order blocks are much more

[09:06] effective than supply and demand zone. For supply and demand zone, we are pretty much looking for the areas, the point of interest, that led to the aggressive move either to the upside or to the downside.

[09:19] imbalance or not. As long as there's aggressive move, you can draw a supply and demand zone there. But for order block, one of the very strict criteria for it to be valid, for it to count as a order block, is that it needs to have a

[09:34] imbalance. Okay? So, that's like the prerequisite for a valid order block. It needs to have that imbalance. And that imbalance basically tell us that smart money has entered at this price point, thereby

[09:47] making the order blocks much more effective than supply and demand zones. identifying valid order blocks. Right, like weird little rules that is surrounding them.

[10:00] a complete set of rule and it's much more simpler to identify them. believe that it's pretty much the same thing. it's not as simple as, "Okay, an order block is going to be much more higher

[10:15] probability than a supply zone." An order block zone. Price will definitely respect the order block. No, that's not true. Right? Like I said, this is just like a general rule for you to follow.

[10:31] It still depends on the context of the market. I've seen situations where a stronger than an order block. Like an but price can still blast right through the order block and go to the supply and

[10:44] demand zone because of the fact that that supply and demand zone is much more higher probability because there's more confluences surrounding that supply and demand zone. Therefore, price moved towards that instead and respected that

[10:57] before going down. Yeah, so I've seen instances where that happens. So just use this as like a reference. Don't treat this as like a source of truth. I will always advise you to like test this out based on

[11:10] um data and then based on your own experience, you can come to your own conclusion, right? Whether which one is like more effective for you.

[11:22] to the charts right now and apply what we have just learned Speaking of that, one more thing I forgot to mention. But if you guys notice for drawing our supply and demand zones,

[11:35] there's a pivot method. The range method requires you to mark up the entire consolidation. The pivot method requires you to mark up only the pivot candle Now, what are we doing when we trade order blocks? We are identifying the

[11:50] pivot candle that led to the aggressive move. supply and demand zones, if you're drawing it via the range method, it's going to be usually much more wider than order blocks itself. Order blocks is

[12:03] usually much more refined because we are always using the pivot method. let's go to the charts and try to identify some good old order blocks.

[12:16] point in time. Let's look at like this one's right here. Okay? So, first of all, step one, identify the imbalance, identify the fair value gap. Where did price move down or up very aggressively?

[12:30] Where did price leave a gap, right? That signaled to us that, you know, smart money has entered into the market. Right? Just by looking at this price aggressive move to the downside right here.

[12:43] This is very obvious, very aggressive. Now, this you want to ask yourself. Because like I said, one of the prerequisite of an order block is that it needs to have some form of imbalance.

[12:56] move to the downside just like this, but if there is no imbalance whatsoever, you cannot find your order block. Okay, so in this case, was there imbalance right here? Yes, there is, right? Because this huge candlestick

[13:09] right here, if you look at the previous low of the previous candlestick and the high of the next candlestick right here, it give like a little gap just like this, giving us our fair value gap. Okay, so this

[13:23] becomes our fair value gap. And we also know that the order block is basically the origin point of the fair value gap. It's the origin point of the imbalance, right? So, what we want to do is to find

[13:38] the last candle before the sharp downward movement. bullish candle before price move to the downside. So, in this case, this right here is the last bullish

[13:52] candle before price move very aggressively to the downside, therefore forming our order block. Okay, so in this case, you can see look at what happens in the next candle, right? So, what happens that after this

[14:06] prices blast right through it and then came all the way down here. So, for me personally I would not really like to mark my order in the next candle prices really blast right through it. So,

[14:21] since price is really blast right through it and use they will use the itself. So, in this instance, what I would do is that I would change the order block location to the next candlestick, which

[14:35] is this one right here and drag it from the high to the low of this pivot candle Okay, so this is just how I personally map order block because I want it to be unmitigated as much as possible so that

[14:49] later on when price comes up mitigated, I can look for shorts and just trade it all the way to the downside. But in this case, if I marked it up at this previous bullish candlestick just following this rule blindly, which

[15:02] says that you should mark up the last bullish candlestick before the sharp downward movement like it just doesn't make sense to me literally blast right through it multiple times, wick up, wick down and

[15:15] then start going down. So, you're much better off just, you know, marking up at like the last candlestick before this sharp downward movement instead. So, that's a bearish order block. Let's try to identify another one.

[15:28] probably this one right here. You can see just by using [snorts] your bare eyes alone, you should be able to just find order blocks very easily. As long as there's like an imbalance present, like in this case imbalance right here,

[15:41] boom, order block right there. Okay, so candle. So, for me personally, I don't really care whether the uh pivot candle is bearish or bullish. I just want to mark

[15:54] up the candle that is right before the imbalance itself, right? So, in this case, this is the imbalance. This is the origin point. This is what led to this sharp move to the downside. And then let's do another one like maybe

[16:08] let me try say this one right here. Okay, so this one right here is very obvious. Price moved very aggressively to the upside. Imbalance, more strong displacement. Now, order block will be the pivot

[16:21] candle that led to this move to the upside. So, that is my pivot candle, and this is my order block. So, in this case, if I were to draw a demand zone using the range method, I'll

[16:33] mark up this entire consolidation. So, this will become my demand zone. And then if I were to draw this demand zone using the pivot method, which is just refining it to the candlestick that caused the reversal, I'll mark it up to

[16:46] this candle right here. So, you can see if I use the pivot when trying to identify supply and demand zone, sometimes it could be the same zone as the order block itself, like in this

[17:00] case right here. Another example, right? Price moved very aggressively to the upside. But in this case, there is no imbalance whatsoever. example. Right? So, in this case, this

[17:13] closed at This is the highest point of this kind of stick. The next kind of this kind of stick. The next kind of stick in balance, right? A lot of big was no imbalance because if you look at the next kind of stick, the low of the

[17:25] next kind of stick was somewhere around here, right? So, there was no gap whatsoever. There's no imbalance whatsoever. So, I cannot just blindly put this as my auto block over here. Okay? So, this is not a auto block

[17:38] is no imbalance. However, because there was aggressive buying pressure, because there was a lot amount of buying momentum right here, we can still deem this as a demand zone. Okay? So, that's why it's so important

[17:53] for you guys to understand the rules that govern these zones. Because when you do, you will be able to discern whether it's a auto block or a supply and demand zone. So,

[18:05] needs to have the gap or imbalance created. No gap, no imbalance, no auto case, even though we got a such a short move to the upside, because of the fact that there was no imbalance being created right here,

[18:20] there is no auto block. Okay? So, later on, price just continued going up and up and up, and then next time, price started pulling back right right here, huge imbalance to the upside, right? We can identify imbalance

[18:34] right here. And then the auto block would be the origin candle, which would be this one right here. Okay? So, this is the pivot candle that caused price to is the pivot candle that caused price to start shifting bullish.

[18:49] it at like the previous kind of stick that caused the imbalance move just like this. I will say once again, I'll leave it up to you guys on how you want to map out. Uh this is this could requires a lot of a little bit of discretion, and

[19:02] my advice advice is always like just go and test it out based on data. Right? price tends to pull back to the auto block that was created by like the reversal candle, the pivot candle, rather than the candle that comes before

[19:15] case, you might want to stick to that method of identifying your order blocks. mistakes that traders tend to make while they are using order blocks.

[19:29] Number one is that they ignore the displacement, right? So, what I mean by that is that they see price moving very aggressively to the downside just like there's an order block somewhere around here.

[19:43] right here. If there's no imbalance, like I said, it's not an order block. It like I said, it's not an order block. It is just an ordinary supply zone. structure. Remember, in order for this order block

[19:57] to be strong, it needs to break structure. actually? I think I mentioned it somewhere. Okay, when I'm speaking. Okay, so I do need I want to see this break structure,

[20:12] right? So, in this case, you can see let's look at this example right here. This order block, what happens is that after the order block was formed, price last swing high, giving us a bullish break of structure.

[20:25] Now, why do we want to see an order block lead to a break of structure? that there was indeed a lot of institutional buying volume, so much that it causes price to take out

[20:38] the last week high. Okay? Because like I said, it requires a lot a lot a lot of money to cause the market to actually take out a particular high or a particular low. Another thing is that people tend to

[20:52] take the order blocks in the wrong part of the premium and discount range, right? So, for example, what happens is that let's say like looking at this example right here.

[21:05] swing high and I'll mark my premium discount up just like this. And then this is where I can identify like an order block right here and then I could potentially identify another order block like somewhere right around here.

[21:19] And then let's say, okay, once again, this is just an example. Let's say we around here because because there was like a pullback over here. order block right here. In this case, there is three order

[21:32] One of them is within the premium pricing and two of them is within the discount pricing. Ideally, if you are looking for longs, you want to wait for price to come down to the order block that is

[21:45] within the discount range. So if price comes down to this order block that's within the premium pricing, it's still a little bit to enter for longs. It's still a little bit early to enter for longs because this could just

[21:57] be price, you know, pulling back. It's going to have more room for it to It's going to have more room for it to drop before it can continue going up. make sure that you are using them at the right place at the right time.

[22:18] minor mistake that people tend to make could potentially be trading them blindly without confirmation. Right? So a lot of times what tends to happen is that people they see that price comes down and they mitigate order block and

[22:30] they immediately enter for a buy just like this. And then next thing you know, price just blasts right through the order block. Once again, I can't emphasize this enough, but if you need multiple confluences before you look for

[22:42] entry. You need multiple evidence, right? To prove that your trade idea is indeed valid before you can actually execute So yeah, that's something that I've talked about

[22:56] membership, so I don't really want to keep nagging you guys, but like that's right? Because I really believe that people don't need to be taught, they need to be reminded. So, don't just trade one particular

[23:10] concept alone by itself. Like, don't just buy a bullish fair value gap. Don't just, you know, like buy a bullish order blocks. You want to use multiple confluences. And speaking of fair value gap, maybe I

[23:23] can try to show you guys how we can combine the fair value gap concept with the order block concept. Okay, so let's use this example right here. Or maybe like this one right here. Okay, so in this case, price is pulling back

[23:37] over here. Now, where is price going to pull back? Well, price is first going to pull back to the imbalance, to the fair value gap before it move up even higher, right? So, that's going to be like the first

[23:49] place where price is moving towards next. So, if I'm looking at this diagram I can see that there was a fair value gap right here, right? That's what allowed me to actually identify this order block right here,

[24:02] because I spotted this fair value gap, I spotted this imbalance. And that's what allowed me to know that, okay, this is the origin candle and this is where the order block is formed. So, in this case right here, I'm

[24:14] expecting price to pull back to this imbalance right here, fill up the imbalance before going up even further. Because if you look at this move right here, it was so overextended. Price went

[24:27] up very aggressively, make a minor pull back, goes up, comes down, goes up very aggressively again, and then right now we can expect it to make a deeper pull back, fill up the imbalance before going up even further.

[24:40] Right, so in this case, how you could potentially trade it is that once price enter the fair value gap, you can look for your entry. And if you don't find your entry within the fair value gap itself, you

[24:52] can wait for price to come down even lower to the order block, then you look for entry. Yeah, so that's how you can go about like combining fair value gap and order block. Just know that the first place

[25:06] where price is gravitating towards next is going to be the fair value gap. And potentially move to the order block. So, if you don't get your entry over here, don't worry, right? It's just price needing more liquidity, so it's

[25:19] block, right? It needs more fuel. So, when price does come back down to the order block, then this is where you can look for your entry.

[25:38] me just go through more example with you guys just to really like ensure that you wrap your head around this concept. Uh let's let's just go through like maybe these ones right here.

[25:55] yeah, maybe I show you this one right here. All right, so in this case, what do we have? We got price moving very aggressively to the downside. Okay, did it just freeze on me? Okay, I'm not sure what just happened,

[26:09] but like I think the chart just froze. Is this where we are now? Let me just remove everything. This is so clouded. Let me just right? Don't freeze on me again, TradingView. All right, so in this case,

[26:24] price move very aggressively to the downside. So, this is where we can see huge imbalance to the downside, right? Imbalance means what? Means that somewhere around here, there's an order block, okay? So, first step is to go and

[26:36] for the imbalance. So, in this case, imbalance to the downside. Well, why is there an imbalance? Right? Because I I I can see very nice gap right there.

[26:49] I almost said cameltoe, but like there's a very nice gap right there. the reason why is because this is the next candlestick, and this is the high of the next candlestick, and then this is the low of the previous candlestick,

[27:01] and you can see with that we got a good old juicy imbalance, or fair value gap, or inefficiency. Okay? So many different names for this thing, right? But, that's the imbalance right there. And our next step as order block traders

[27:15] is to find the origin point of the imbalance by looking for the pivot candle that led to the imbalance itself. So, in this case, So, in this case, this becomes the pivot candle, right?

[27:29] If you were to draw it at the last bullish candlestick, which is this one right here, look at what would happen, all right? It would just be like candle just blasts right through it. So, it doesn't really make sense for you to

[27:41] draw it at the last bullish candlestick. So, I prefer to just draw it at the pivot candle, which can be bearish, can be bullish, I pivot candle, which is really the origin point, right? So, in this case, I'm

[27:55] pivot candle to the low of this pivot candle, and this is my order block. guys some some some for some of you guys

[28:10] newbies to actually like just just see it. Now, what about this right here, right? This gap right here is what we call your fair value gap.

[28:25] Fair value gap, imbalance, okay? Whatever you like to call them. So, now, using the concept that we just learned, we have learned so far about order block and fair value gap, right now price has

[28:39] moved all the way down here. So, would I be entering for a sell right No, because it's a stupid decision to enter for a sell right here. If I enter for a sell right here, I'm just trading based on FOMO, right? It's just me

[28:53] trade when the move has already happened. Right? You can see price has already came all the way down here. Why would you want to, you know, be part of groupie, you know? You know?

[29:06] Like that's pretty much like a really good analogy, right? Like you don't want to do that. This thing has already been eaten. Now, if you eat it again, you're pretty much, you know, being the tuna body, right?

[29:20] I don't even know where this is going. But like my point is price has already made its move, okay? Price has already made its move. You don't want to be the third guy. You want to be the first guy, right? So, if that's the case, you're

[29:34] much more better off just waiting for price to pull back into any one of these entry and short it all the way down here. Okay, because if you enter right here, you're risk placing a stop loss above this high, and then you're just

[29:49] going to have a very bad risk to reward, right? It just doesn't make sense. So, your hands, being very patient, and just doing nothing until price comes back up to the order block or the fair value gap. Let me go back to the example.

[30:04] Where is the example? Oh, there we go. Yeah, so in this case, you're much more better off just waiting and waiting. TradingView right now. TradingView does not want me to shine today.

[30:19] Why is it? Let me just Let me just reload this, yeah. today, man, because I guess this Market Mechanics Mentorship Series is just way too powerful. I'm revealing too much, man. I'm revealing

[30:32] too much. Like this the CEO of TradingView is like, "Yo, Bret Shoob, our secret sauce right here, man. You can't be doing this shit." Okay, I don't know where is the other example anymore. Was it on EU? Was it on

[30:45] going to do right now is that I'm just going to pull up like a random example, like a similar example. Let me try to find a similar example for you like maybe this one right here. Okay, this one

[30:59] Okay, so similar example. Uh right here. Okay, so once again, using the same logic, imbalance over here, right? that as my order block right there.

[31:29] There's a Okay, in this case, there's actually two imbalance, right? There's one here and then there's another one right here. occur, right? So, you can see imbalance number one, imbalance number

[31:43] here and then we got order block right here. So, like I said, back to what I was saying, you don't want to be the guy that is entering way too late. You're hands and just waiting for price to mitigate either one of these zones, then

[31:57] you make your entry from there. Right? So, in this case, you do nothing and you just wait very patiently, right? Until price comes into your fair value gap. Once price comes into the fair value gap, now we can expect a move to

[32:10] can look for an entry. Okay, this is where you can look for an confirmation. Okay? Okay, so let's say in this case, you did not get an entry right here. Okay, cool.

[32:22] so price came all the way up here to the fair value gap, the next fair value gap, the order block that we have up here. So, now there's an even higher chance now. Because he has not only just mitigated

[32:37] block. And in this case, price actually reversed and hit up. Why? Right? Why did price not respect the auto block? happen, right? You told me that price is just going to come down magically after

[32:50] No. Like I said, it depends on the context from. If you zoom out and look at a higher time frame, you realize that price is actually incredibly bullish. So, if you're selling a auto block

[33:04] you're trying to do is that you're trying to stop a rocket from going up, laws of gravity. Instead, what you should do in this case

[33:16] is to look for long positions at a bullish auto block. So, in this case let me just try to find like an example for you to to see. Okay, so in this case right here.

[33:30] over here. Price came down, consolidated. Okay, this is demand zone, and then this is another demand zone. another demand zone. Okay, now what about this? Okay, so

[33:42] right there we have an auto block right here. upside, right? This is your bullish auto block.

[33:58] for longs when price comes down to that bullish auto block to trade it to the Assuming that you get your entry You get your entry confirmation in there.

[34:11] If price has came all the way down here right? You can see price has came all It doesn't seem to be stopping whatsoever, and price just blasts right Then, okay, this is the classic liquidity sweep, which you're going to

[34:25] Then, you shouldn't just be like blindly, you know, trying to enter for a yourself to enter for a long right here. You're much more better off waiting for structure to shift. Okay, so in this case, what happens is

[34:40] bullish, and then price goes up even further. So, if I go down to the lower time frame, I can see that you can see price came up here, they got the last price came up here, they got the last lower high. Once this got taken out,

[34:55] Because we already got a market shift. And right now, price just continue bullish. But before it does, notice where price pull back to, right? So, after this market shift, we got a break of structure to the upside right here.

[35:08] an imbalance over here, right? You can see huge bullish candlestick right here. Imbalance have been formed right there. This is your fair value gap.

[35:24] Right there, this is the fair value gap. And then, this becomes the order block, right? This becomes the order block. >> So, this is the 4-hour fair value flip zone.

[35:36] No, this is the 1-hour fair value gap. So, in this case, what happens is that price actually pull back to the fair value gap, mitigated the fair value gap, and let's see where the price got a reaction from there, and then continue

[35:48] another thing that I wanted to like tell you guys about. to the order block. Sometimes it can come down to the order block and then go. Sometimes it can just go down to the fair value gap and then go. It all

[36:04] fair value gap and then go. It all depends on the amount of liquidity the market has when price is approaching the zone itself. Okay? So, all we have to do is to like just mark those zones up and

[36:17] just expect price to come down to either one of those zones. And out of whichever those zones whichever one actually gave us the entry confirmation, entry trigger, that's the zone in which we want to enter the trade

[36:29] about entry confirmation entry trigger later on. But I hope that I've shined some light in terms of how to properly identify order blocks. Just to give you like one last example,

[36:42] it'll probably be this one right here. So, in this case, price came down very aggressively over here. And then you can see this is price consolidated around here, started dumping heavily right here.

[36:55] block right here? No, there's no order block here. Okay, yeah, maybe this one right here. Yes, there is order block right here. Okay, so this is where price moved down very aggressively just like this.

[37:08] that as order block to be honest with you. pulling back and coming down more of like a regular supply zone. because this is something important that I want to show you guys.

[37:22] just like this, right? Swing low, swing highs. And then this is where let's say there's another order block that we have up here. All right, in this case, which order block is price most

[37:35] Is price going to respect this order block or this one right here? Well, most likely, once again, based on going to come up and mitigate this before reversing.

[37:49] All right, like in terms of probabilities, holding. Well, this zone only have like, let's say a 50% chance of holding. Once again, just in terms of probabilities, right?

[38:04] this zone is higher up here within the premium pricing. that this is still some of like a supply zone or even like a order block if you price did get a reaction from it, right? Price moved all the way up here, reacted

[38:20] it started reversing and heading back down. right? So, you cannot doubt the effectiveness of order block. It still effectiveness of order block. It still did its job, right? It's just the extent

[38:34] mitigation. And that is determined by the strength Right? So, in this case, you can see this thing is way more stronger than this thing right here. When price mitigate this, it caused a

[38:48] little move. When price mitigate that, it caused a huge move to the downside. Same order block, we literally apply the same principles to identify the order block, but because you place them in different context, different location,

[39:00] different context, different location, one allow you to get a much better trade compared to the other one. You know, compared to the other one that we have compared to the other one that we have right here.

[39:15] to not just understand how to identify order blocks, but also understand how to order blocks, but also understand how to identify valid order blocks, when to trade the order blocks, but most importantly know when not to trade the

[39:28] order block, right? Know how to combine the fair value gap with order block, with market structure, with supply and demand zones, with all of these good old market mechanics concepts that you're going to be learning soon as well.

[39:40] So, to keep it simple, an order block is basically the last candle before a strong impulsive move that causes displacement. It's the origin point, right? It's the first time that smart money entered into

[39:54] the market. Now, your job is to get in the second time they want to actually enter at that exact price point, right? Your job is to catch this imbalance move. And you're able to catch a trade at imbalance move by identifying the

[40:07] order blocks and entering when you see a confirmation at that price point, at confirmation at that price point, at that time. like please

[40:21] just understand the logic behind order block, right? Don't just blindly stick to these principles just because I say so. Test it out, you know, gather some experience trading with it, and then

[40:34] based on that you will realize that, you know, based on data Okay? Like men lie, women lie, but numbers don't lie. Numbers don't ever So, yeah, this is something that I've just tested it out myself, and I

[40:48] realized how effective order block is. But as effective as it may be it still depends on a lot of different factors, right? Liquidity, supply and demand zones near it, inducements, order flow, market structure.

[41:04] If all of those stuff is misaligned, then the order block, no matter how out. Right? It can be the strongest order block that led to the most freaking imbalance move out there, but if it

[41:16] doesn't have multiple evidence, multiple variables, multiple confluences backing it up, it's useless. It's good as nothing. Price will just blast right through it. So, with that being said

[41:29] just continue practicing more, continue putting in the reps, and simple. I don't think like I need to dive too deep into it because if you guys understand imbalance and fair value gap, you will be able to identify the

[41:41] order block very easily, right? It's just adding one more step to it. practice the better you get at this, forward to seeing you guys on the next episode, and as always, remember you're

[41:54] episode, and as always, remember you're just one trade away.