Class 13 Order Blocks

In SMC we are interested in labeling points of interest.

First POI. for confirmation use fibo, whyckoff trend lines, fvg. above pic has two points of interest

Order Blocks are most imp for level marking.

impulse wave is the one which is coming by breaking a level. either structure high or low

POI 2 is the most imp. when price come back to test HL

OB is the points where institutional orders are placed.

the point from, where the price moved rapidly in one direction is called order blocks.

OB Conditions.

strong engulfing as price swept low and high of order block candle

engulfing candle should be strong momentum candle. it should not have big upper wick. If its not then this OB is weak as it has rejection now.

Is It Valid ?

there is no trade from the order block at the time of its forming. trade is when price comes back again to this ob from above.

OB is invalid at the time of creation.

OB is valid only of price rise from this place and break its previous structure

price only breaks its structure when it has power. e,g smart money has executed its orders.

trade at the break of previous high can be taken by the help of absorption but its not recommended. good trade is from OB.

Very good level to trade from smc and ict concepts. but we need confirmation

It can still fail. e.g. this is 15 min Time frame OB and from above price is being rejected from 4H OB. e,g, sellers are very strong.

Volume will give confirm trade. aggressive buying is place limit order at ob with predefined sl out of fear of missing it.

Aggressive buying vs confirmation buying

both has advantages and disadvantages. aggressive buying give good profit but more chance of hitting sl.

40-50 pips are must. if this OB is of 15 min and from above price is being rejected from 4H OB then still a rejection from OB will come. if you are aggressive buying then check for volume confirmation at this stage if its not confirm then exit

sl will be below OB candle.

Interesting example. First OB is invalid as after ob price didnt break structure. second OB is valid. in this example first ob worked but not second but we will stick to the rules. OB area is also called supply zone.

again valid ob is second one. as it breaks the range low

Valid OB. See target from the place from where the price fell

valid ob but this most probably hit sl. due to manipulation. target is from where the price started fall. if we have applied vsa then this trade is good

if fvg and order blocks are formed together then trade is not the same. possibility is price reverse without touching ob