AI Summary
This video provides a concise, practical explanation of order blocks in trading, defining them as the last opposite candle before a strong price move. It covers how to identify them, the three main rules for validity, and a simple entry strategy, all within a three-minute timeframe.
Chapters
An order block is the last candle opposite the close before a strong move. Large players (banks, funds) place large positions before an impulse move, and the price holds until the impulse occurs.
An important criterion for a valid order block is displacement: a strong movement after the candle. The impulse should be at least x2 the size of the order block candle.
In a bullish scenario, a local low forms in a support zone, then a high is built. The price often returns to rebalance the impulse (fair value gap) before continuing up. A bullish order block is the last bearish candle closing down before a sharp move up.
A bearish order block is the last bullish candle closing up before a sharp downward move. It forms at resistance, and after the impulse, the price may return to that level before continuing down.
1) Displacement: strong impulse, minimum x2 from the order block. 2) Match with your analysis (e.g., support/resistance). 3) Several candles in a row with the same closing.
Enter from the beginning of the order block candle opening up to 50% of the candle. Place stop loss under the order block or nearest low. Take profit at the next logical high, not the maximum. Don't be greedy: close 80% at the target, leave 20% for super profit.
Do not move stop loss and take profit after the trade is open. If analysis is incorrect, remove the order entirely. For more info, visit the Telegram channel.
Order blocks are key reversal zones where institutional activity creates strong moves. By identifying displacement, matching with key levels, and following a disciplined entry strategy, traders can effectively use order blocks in their trading.
Mentioned in this Video
Tutorial Checklist
Study Flashcards (8)
What is an order block?
easy
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What is an order block?
The last candle opposite the close before a strong move.
00:02
What is displacement in the context of order blocks?
medium
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What is displacement in the context of order blocks?
A strong movement after the candle, with an impulse of at least x2 the order block candle.
00:29
What is a bullish order block?
easy
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What is a bullish order block?
The last bearish candle closing down before a sharp move up.
00:42
What is a bearish order block?
easy
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What is a bearish order block?
The last bullish candle closing up before a sharp downward move.
01:25
What are the three main rules for a valid order block?
medium
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What are the three main rules for a valid order block?
1) Displacement (strong impulse, min x2). 2) Match with your analysis. 3) Several candles in a row with the same closing.
01:51
Where should you enter a trade based on an order block?
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Where should you enter a trade based on an order block?
From the beginning of the candle opening up to 50% of the order block candle.
02:21
Where should you place stop loss and take profit?
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Where should you place stop loss and take profit?
Stop loss under the order block or nearest low; take profit at the next logical high, not the maximum.
02:21
What is the recommended profit-taking strategy?
easy
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What is the recommended profit-taking strategy?
Close 80% at the target, leave 20% for super profit.
02:33
💡 Key Takeaways
Definition of Order Block
Provides a clear, concise definition that is the foundation of the concept.
00:02Displacement Criterion
Emphasizes the importance of displacement as a key validity filter.
00:29Three Rules for Validity
Summarizes the essential conditions for a valid order block, making it actionable.
01:51Entry Strategy
Provides a concrete, rule-based entry and exit plan, useful for practical application.
02:21Full Transcript
[00:02] This is an order block. This is an order block. This is also an order block. What is an order block? And the order block is the last candle opposite the close before a strong move. What is this
[00:16] ? And large players such as Goldman Sax, GP Morgan, City Bank, Black Rock, that is, banks, private equity funds, and institutional investors, place a large volume of positions before the impulse movement. The price will then hold until the
[00:29] an impulse in the direction of accumulation occurs. An important criterion for an order block accumulation zone. There must be displacement - this is a strong movement after the candle. How to find an order block on a chart? That is, what I showed,
[00:42] we have a high or low in the opposite direction. Now let's look at a bychep example. That is, we have a sha we go and a local piglow is formed, that is, in the support zone. And after that, we have a
[00:56] are building a high. And after that, the price is obliged to return in order to rebalance this impulse. That is, another important point is that after imbalance or fair value gap will form, and after that, the price can continue to go
[01:12] up. That is, the bychrblok is the last bearish thing. Candle closes down before a sharp move up. Important remark. The Aigation block will mitigation block is, be sure to watch my other videos. A similar
[01:25] example of a bearish order block. We are forming a high, and, accordingly, a logical level, and resistance. That is, from here we have a strong impulse going in the opposite direction . After this, the price can go
[01:38] . After this, the price can go in such a trend direction to return to this price and then go up. Ah, go down. That is, a bearish order block is the last bullish candle, closing up before a sharp
[01:51] downward move. Three main rules for a valid order block. First of all, the first rule is that there must be displacement. This is a strong impulse. Minimum x2 from the an order block - this is the first candle, it goes down, conditionally, and then in the opposite
[02:05] impulse of at least x2 formed. Then the second rule is that it must be a match with your is, the third rule is several candles in a row with the same closing. This will be strategy for entering trades. We have an entry order block, or from the beginning of the
[02:21] an entry order block, or from the beginning of the candle opening up to 50%. In this zone we enter into a trade. Next, we place the top loss under the overblock or the nearest low. Take Pro we bet on the next logical high, but not on the maximum. And it is important
[02:33] to note, don’t be greedy. If you are actively monitoring the deal, then close 80% when you reach yours here, and you can leave the initial target and 20 further. This will be a super profit . I will note that do not move the stop loss
[02:45] and take orders and the trade is already done. If you realize that the analysis is incorrect, remove the order entirely. If you want more information on trading, visit my Telegram channel.
