Overview
This lecture covers advanced strategies for spotting order blocks, analyzing them across time frames, and applying them to real market charts, building on concepts from the previous session.
Order Block Recap
- Order blocks are the price moves prior to a liquidity sweep or prior to a break of structure.
- In an uptrend, the order block is the last down move before a break of structure to the downside.
- In a downtrend, the order block is the last up move before a break of structure to the upside.
- Order blocks mark areas where large orders were filled, setting up future retracements or reversals.
Spotting Order Blocks on Charts
- Identify the move (candle or range) before a major liquidity sweep and break of structure as the order block.
- Use higher time frames (4H, Daily) for major structure shifts, then scale down (1H, 15m) for precision entries.
- After a break of structure, anticipate price retracing back into the order block area to fill more orders.
- The best entries often occur when price returns to the order block and shows a new break of structure in the direction you want to trade.
Working Across Time Frames
- Understand the move's timeframe: a 4H order block needs a wider stop and targets higher-level liquidity.
- Scale down to lower timeframes to define your entry and stop more precisely.
- Always match your stop loss and take profit targets to the timeframe of the order block you are trading.
Examples & Practical Applications
- Mark order blocks before major moves, watch for price to return, and look for structure breaks for trade entries.
- Patience is key—wait for price to come back to the order block and confirm your entry with a structure break.
- Use prior areas of liquidity and imbalances as profit targets.
Key Terms & Definitions
- Order Block — The price move or candle before a liquidity sweep and break of structure, where large orders are filled.
- Liquidity Sweep — A price move that takes out previous highs or lows, triggering stop losses and filling large orders.
- Break of Structure — When price moves past a key support/resistance, indicating a shift in market direction.
- Imbalance — A price area where there was unequal buying/selling, often leading price to return for re-balancing.
Action Items / Next Steps
- Find and label five order block examples on three different time frames for any pairs you trade.
- Practice identifying the move prior to the break of structure and marking order blocks as price moves.
- Be patient and wait for retracements into order blocks and new breaks of structure before entering trades.