Lecture Notes: Boot Camp - Order Blocks

Introduction

• Boot camp session on learning order blocks
• Focus on strategies involving order blocks
• Structure of the boot camp:
  • Day 1: Overview and importance of order blocks
  • Day 2: How to spot order blocks
  • Day 3: Applying everything on the charts

Order Blocks Overview

What is an Order Block?

• An order block is the move up or down that causes a liquidity sweep
  • Move up/down results in orders being filled
  • Price range for orders filled is the order block
• Example: Move up causing a break of structure, orders get filled in that price range, creating an order block

Why are Order Blocks Beneficial?

• Understanding the price range where orders were filled
• Helps predict where price may retrace to fill more orders
• Works similarly to fair value gaps
  • Market might push price back into order blocks to fill more orders
• Useful for identifying retracement points

Strategy Using Order Blocks

Ranking of Entry Points

1. Order Block
   • First point of interest for retracement plays
   • Often provides better entry than initial liquidity sweep and break of structure
2. Fair Value Gap
3. Equilibrium
   • All are used for retracement entries but order blocks are prioritized

Characteristics of Order Blocks

• Only one order block per trend
• Form off of a liquidity sweep resulting in orders being filled
• Remain until a new trend emerges with another break of structure and liquidity sweep
• Can appear on any time frame

Application and Visualization

Key Concepts

• Move prior to liquidity sweep creates an order block
• When structure breaks, price may retrace back to the order block to fill more orders
• Detailing price movements within order blocks to understand potential retracement and new trends

Time Frame Relevance

• Order blocks are relevant on all time frames (e.g., 1-minute charts)
• Refer to accumulation areas or zones of high order activity

Conclusion

• Recap of the importance of order blocks in trading strategy
• Explanation of spotting them up next session
• Mention of no homework for explanation days
• Encouragement to understand order blocks for better market analysis
• Reminder: No trading on high-news days (PPI, FOMC)

Next Steps

• Next lecture: How to spot order blocks
• Focus on applying concepts to market charts

Additional Notes

• Mention of market conditions during high-news periods (e.g., PPI, FOMC announcements)
• Trading advice: Avoid trading on days with major news events due to market volatility

See you all tomorrow!