How to identify High Probability Order Blocks in Trading

Post Reply
User avatar
Ali
Expert Trader
Posts: 20
Joined: Mon Nov 27, 2023 1:30 pm
Contact:

How to identify High Probability Order Blocks in Trading

Post by Ali »

Order Blocks are the zones where big banks or market makers have placed their pending orders, and usually, when prices return to those zones, those orders are filled, and new trends start in the market. 
There are two types of order blocks:
01 Bullish Order Block
The range of the last bearish candlestick before a bullish impulsive wave that breaks the market structure, making a higher high, represents the bullish order block zone. When the price returns to this OB zone, it will hold the price higher. 
The break of the market structure in a bullish direction is necessary as it will confirm that the market wants to go higher. This confluence will help to spot only high-probability zones. Besides BMS, also make sure that the overall market trend is bullish. 
Bullish Order Block.png
02 Bearish Order Block
The range of the last bullish candlestick before a bearish impulsive wave that breaks the market structure, making a lower low, shows the bearish order block zone. To continue the previous trend, the price will return to this order bock to fill the pending orders, and then the market will continue the previous bearish trend. 
Bearish Order Block.png
High-probability order blocks can be identified by adding confirmation of trend and BMS. 
You should take the high and low of the bearish/bullish candlestick to draw the order block zone. 
Example #1
Analyze the daily timeframe chart of AUDUSD, price was making lower lows. It was breaking the market structure in a bearish direction. After a few bearish swings, the price broke the market structure higher. Then, we highlighted the zone using the last bearish candlestick before the bullish impulsive wave.
The next price returned to the Order block zone exactly and started a new bullish trend. So, by using high-probability order blocks, we can ride the big trend in the market. 
Bullish Order Block example.png
Example #2
Below is the BTCUSD 15M chart. Analyze that price was making higher highs and breaking the market structure higher. After a few bullish swings, the price broke the market structure in a bearish direction, making a low. Then, we highlighted the order block zone using the high and low of the last bullish candlestick.
Next, the price returned to that bearish order block zone filled the pending sell orders and then started the bearish impulsive wave.
Using this strategy, we can ride the trend created by market makers. 
Bearish Order Block example.png
BlueOcean
New Trader
Posts: 2
Joined: Sat Oct 05, 2024 7:08 am

Re: How to identify High Probability Order Blocks in Trading

Post by BlueOcean »

Hello Forexbee.
Greetings, Can you expantiate more on the essential difference between demand and Supply Zones from Support and Resistence .

Regards
User avatar
Ali
Expert Trader
Posts: 20
Joined: Mon Nov 27, 2023 1:30 pm
Contact:

Re: How to identify High Probability Order Blocks in Trading

Post by Ali »

BlueOcean wrote: Sun Oct 06, 2024 8:27 am Hello Forexbee.
Greetings, Can you expantiate more on the essential difference between demand and Supply Zones from Support and Resistence .

Regards
I have answered this question in anther topic
👇🏻👇🏻
viewtopic.php?t=1174-difference-between ... ply-demand
Post Reply