Lecture Notes on Order Blocks

Introduction

• First technical video in the A to Z guide.
• Focus on 'Order Blocks'.
• Emphasizes writing down questions for later clarification.

PD Array (Premium and Discount Array)

• Premium Array: High price, likely to sell.
• Discount Array: Low price, likely to buy.
• Application varies if seeking higher or lower prices.

Understanding Order Blocks

• Definition: Large institutional orders within a block.
  • Institutions buy on down candles, sell on up candles.
• Logic: Institutions act opposite to current price due to large order sizes.
• Order Block Components:
  • Bullish Order Block: Down candle.
  • Bearish Order Block: Up candle.

Criteria for Bullish Order Blocks

• Needs to come off of support.
• Must break the high of the down candle.
• Should return to the order block for a buying opportunity (not financial advice).

Mean Threshold

• Definition: 50% of the candle bodies, important for holding.

Identifying Order Blocks

• Can consist of multiple consecutive candles (up or down).
• Examples include coming off support and breaking high/low respectively.

Importance of Context

• Not every up or down candle is an order block.
• Must align with market bias (bullish or bearish).

Bearish Order Blocks

• Form off resistance.
• Needs to break the low of the up candle.
• Respect mean threshold.

Probabilities in Trading

• Not all order blocks will hold.
• Trading is about probabilities, not certainties.
• Importance of sticking to consistent basics.

Developing Your Trading Edge

• Importance of personal analysis and intuition.
• Use guidelines but develop your own trading methods and logic.

Study and Practice

• Focus on identifying order blocks independently.
• Observe which order blocks hold and which don’t.
• Use journaling to note observations and patterns.

Conclusion

• Mastery of order blocks can potentially lead to profitability.
• Encouragement to study price action and journal findings.
• Next video will continue on related topics.