Order Blocks
Last updated
Last updated
Order Blocks are specific price zones where significant buying or selling activity has previously occurred, typically initiated by institutional traders or large market participants. These blocks represent areas of high interest, where large orders have been placed, leading to substantial shifts in market direction. When price revisits these areas, it often reacts due to the remaining unfilled orders, making order blocks key levels of support and resistance. Traders use them to anticipate price reversals or continuations, as they mark areas of potential buying (demand order blocks) or selling (supply order blocks) pressure.
Each order block displays two bars that represent the percentage breakdown of bullish and bearish volume within that block:
Bearish Volume (Red Bar): This bar indicates the percentage of volume that is bearish within the order block. A high percentage here suggests that a significant portion of selling activity occurred at this level, reinforcing the bearish sentiment in the order block. This could indicate strong resistance if the price revisits this zone, as sellers previously dominated this level.
Bullish Volume (Green Bar): This bar shows the percentage of volume that is bullish within the order block. A high percentage of bullish volume suggests strong buying interest at this level, indicating potential support if the price revisits this area. Buyers were previously active here, which could lead to a reaction if the market approaches this level again.
In practical terms, these volume bars help traders assess the strength of the order block:
High Bearish Volume in a Sell Block: Strengthens the potential resistance at that level.
High Bullish Volume in a Buy Block: Strengthens the potential support at that level.
This data allows traders to understand where significant buying or selling pressure has taken place and to anticipate potential market reactions when price re-enters these zones.
Total Volume with Percentage: Each order block shows the total trading volume within the block, along with the percentage this volume represents relative to all identified order blocks. For example, if an order block shows "45%," this means it holds 45% of the cumulative volume across all order blocks on the chart. Higher percentages indicate that this block contains a substantial portion of trading activity, potentially signaling a stronger support or resistance level.
Delta Volume: Delta volume measures the difference between buy and sell volume within the block. If the delta is positive (buy volume is higher than sell volume), it suggests bullish sentiment within the block, indicating potential support. Conversely, if the delta is negative (sell volume is higher than buy volume), it indicates bearish sentiment, suggesting resistance. Delta volume provides additional insight into market sentiment within each order block, helping traders anticipate possible price reactions.
Based on Total volume and delta volume order blocks are categorized into High, Balanced and Strong blocks for easy identification of significant levels
Breaker Blocks are key levels derived from price action where previously strong resistance or support was broken, signaling a significant change in market sentiment. They act as a retest zone for price, often providing high-probability trade entries.
Location: Found at areas where the market reverses sharply after invalidating a prior support or resistance.
Retest Behavior: Price frequently pulls back to the breaker block before continuing the trend.
Trend Confirmation: Breaker blocks confirm directional bias when aligned with overall market structure.
Bullish Breaker Block
Bearish Breaker Block
These Blocks are excellent for precision entries in both trend continuation and reversal strategies.
Macro Order Blocks represent broader market perspectives rather than solely focusing on specific timeframes. They provide insight into larger-scale order flows by capturing key zones where significant buying or selling interest exists across the broader market structure. These blocks emphasize the overall market flow rather than isolated intraday movements.
Aligning with Market Flow: Use macro order blocks to confirm the broader market trend, ensuring trades align with the overall flow of orders.
Strategic Zones: Identify high-impact zones where price is likely to react strongly, offering opportunities for significant entries or exits.
Refinement with Simple Blocks: Pair macro order blocks with simple order blocks to pinpoint precise execution points within the broader flow.
Blocks with a high percentage of total volume are likely to be more significant support or resistance levels. A strong order block with high bearish volume and negative delta (more selling) could act as a substantial resistance zone.
If an order block shows high total volume with a negative delta, it might indicate strong sell interest. This could suggest a reversal opportunity and move price down.
By analyzing the delta volume and total volume within order blocks, traders can make more informed decisions on where to enter or exit trades, knowing whether buying or selling pressure dominated at those levels.
The provided Order Blocks are designed to be cleaner in nature and more effective in their detection of key market levels. By analyzing volume and volatility, these Order Blocks aim to simulate and predict where large areas of market orders may rest. By forecasting these areas they give excellent support or resistance areas.
The Order Blocks settings help customize how order blocks (areas of institutional buying or selling) are displayed and analyzed on the chart. Here’s a breakdown of each option:
Enable Blocks Activates the display of order blocks (zones of institutional buying or selling) on the chart, enabling traders to analyze key price zones.
Show Last Specifies how many historical order blocks to display, helping users focus on recent or relevant areas of institutional activity.
Granularity Filters order blocks based on their strength:
Weak, Balanced, High, Strong: Displays order blocks categorized by their influence and relevance.
All: Shows all order blocks without strength filtering.
Mitigation Method Determines how an order block is classified as mitigated (filled):
Touch: Mitigation occurs when price touches the block.
Wicks: Counts only wick interactions.
Close: Considers the body of a candle closing within the block.
Average: Uses an average-based method for mitigation.
Timeframe Allows users to choose the timeframe for displaying order blocks, independent of the current chart timeframe. Ideal for multi-timeframe analysis.
Show Metrics Provides additional information about the order blocks, including total traded volume and strength of buying/selling activity.
Show Traded Volume Highlights the traded volume within each order block to gauge its influence on market movements.
Extend Mode Extends the visibility of order blocks to better observe their interaction with price action over time.
Show Trading Activity Enables the display of trading activity metrics (e.g., buy/sell imbalances) within order blocks, providing detailed insights into market behavior.
Show Rating Assigns strength ratings (e.g., Strong, High, Balanced, Weak) to order blocks, visually indicating their potential market impact.
Show Details Allows customization of the display size and details of metrics (e.g., Small, Huge), tailoring the chart view to user preferences.
Show Means Displays the midline of the order block, which can be used as a reference for price retracements or mitigation levels.
Macro Blocks Enables broader market order blocks that account for the overall flow of institutional interest and activity, offering a "big-picture" perspective.
Enable Breaker Block Activates breaker block identification, highlighting zones where resistance flips to support (or vice versa) after a market structure shift.
These settings allow traders to adjust order block visibility, granularity, and additional metrics, offering flexibility for analyzing institutional buying and selling zones based on individual preferences and market conditions.
This information provides a comprehensive view of each order block's volume profile, giving traders insights into the strength of buying or selling interest, which can enhance trading precision when approaching key levels.
