What is Order Block?

Order blocks are another view of the supply / demand zones. Based on order blocks, traders can improve their trading skills with the following two results:

- Find opportunities to enter effective reversal orders

- Find price zones that have a great influence on the psychology of traders.

To put it simply, Order Block is an area to search for good entries for reversal trades (reversal entry) or continuation trades (continue entry), for example, picture 1 above.

- OB is the last bearish / bullish Candle near Support / Resistance (support / resistance) before the price moves strongly.

The concept is relatively simple, but it is extremely important. And the determination is also very easy to understand.

How to determine Order Block and trade with Order Block?

- There are 2 types of OB: Bullish OB (BuOB) and Bearish OB (BeOB)

- Bullish Order Block (BuOB) is a Bearish candlestick near the Support level, before the price moves up.

In an uptrend, we identify the BuOB line

- Bearish Order Block (BeOB) is a bullish candle near the Resistance level, before the price moves down.

In a downtrend, we identify BeOB

Bullish Order Block

- Is the last bearish candle before the price increases sharply. OB's strong bullish candle is a Bullish Engulfing candle. Determine as shown above, Set Entry, Take Profit, Stop Loss as shown below.

Bearish Order Block

- Is the last bullish candle before the price drops sharply. The strong bearish candle right after OB is the Bearish Engulfing candle. Determine entry, Stop loss, Take profit as shown below

When should Order Block be traded and when should Order Block not be traded?

- To fully understand this question, we need to completely understand the Market Structure.

Let's carefully read the article market structure and Dow Theory to supplement our knowledge of Order Block!

4. Conclusion

- OB is an extremely important and easy to understand lesson

- OB is a strong Supply Demand zone.

- We buy when the price reaches Bullish OB in an uptrend

- We sell when the price reaches Bearish OB in a downtrend.

Summary :

This is the reference information listed by Trading Insight and is a reference for investors to find more methods for themselves. This is not investment advice. Thank you very much