Order Block

🔵 Definition
Bullish - consecutive down-close candles that have the most range between open-close and are near a support level.
the lowest candle is the strongest. Wait for the price to give and identify that larger orders are coming into the market there should be a strong reaction towards the opposite side once the price reaches an important level.

🟢 Validation
order block is validated when the high of the lowest down-close candle of the low or the low of the highest up-close candle is traded through by a more recently formed candle.

Ideally, the best bullish order block will not see the price trade below the mid-point (mean threshold) of the candle.
Use mainly bodies, not the wicks because it contains pure data as everyone uses different brokers and exchanges this can make wicks unreliable.

🟠Displacement
price may run away from the order block if it's valid after there is a strong reaction so you need to be patient for it to retrace its move and retest the order block. Displacement is evident in price action there is an institutional entity behind the move. Displacement may also leave behind another point of interest - FVG - Fair Value gap.

⚪ Entry and risk
when the price impulsively moves away from the order block, it may retrace after displacement which can offer a buying opportunity as the price returns to the open of the bearish order block candle
Target the buy stops above the latest high as your first TP
The low of the bullish order is a relatively safe stop-loss placement.
Order block is strongest it is the lowest candle that took out liquidity from previous lows.

Let me know your opinions

Good luck in trading

Dave FX Hunter ⚔