Order block entry On GBP/USD On The 4-Hour Chart
We have an Order block on GBP/USD in the 4-Hour Chart.
If we look at the daily chart, we can see the bears have been in full control for most of 2022.
Today we have broken through a daily support setback in the middle of July. Fundamental news pushed the price further down at the end of last week.
So, establishing our higher time frame bias as bearish, we now must look for opportunities to go short.
I would not suggest looking for long setups as the entire market is currently very bearish.
I have highlighted the order block zone in yellow. I have put a zone around the most recent bullish candle before we saw that impulsive break downwards. Notice the volume that accompanied that bearish break. That volume bar far exceeded any previous volume in its close vicinity.
I would wait for the price to retrace back into the yellow order block zone around the 1.182 price level.
Once the price retraces back into this zone, my short position will open as my targets will be the previous price structure and support around the 1.167 price level.
I always aim for a minimum risk to reward of 1 to 2. However, if this entry gets triggered and the bears still push the price lower, we could potentially look at greater returns, riding the price lower still targeting weekly support zones around the 1.14 price level. However, that is a conversation for another time. We are still waiting for the price to retrace back into our zone.
Order blocks can be very profitable when traded correctly. However, one must consider that since they are very popular, the banks and market makers know that we retail traders like to trade them and can use that knowledge to their advantage. So be very careful when trading them. Make sure you have a list of rules and criteria that you have written out for yourselves when it comes to entries, stop losses, and targets. Backtesting is extremely important.
Mondays can be quite slow. However, let's see what happens throughout the London and New York session.
If we look at the daily chart, we can see the bears have been in full control for most of 2022.
Today we have broken through a daily support setback in the middle of July. Fundamental news pushed the price further down at the end of last week.
So, establishing our higher time frame bias as bearish, we now must look for opportunities to go short.
I would not suggest looking for long setups as the entire market is currently very bearish.
I have highlighted the order block zone in yellow. I have put a zone around the most recent bullish candle before we saw that impulsive break downwards. Notice the volume that accompanied that bearish break. That volume bar far exceeded any previous volume in its close vicinity.
I would wait for the price to retrace back into the yellow order block zone around the 1.182 price level.
Once the price retraces back into this zone, my short position will open as my targets will be the previous price structure and support around the 1.167 price level.
I always aim for a minimum risk to reward of 1 to 2. However, if this entry gets triggered and the bears still push the price lower, we could potentially look at greater returns, riding the price lower still targeting weekly support zones around the 1.14 price level. However, that is a conversation for another time. We are still waiting for the price to retrace back into our zone.
Order blocks can be very profitable when traded correctly. However, one must consider that since they are very popular, the banks and market makers know that we retail traders like to trade them and can use that knowledge to their advantage. So be very careful when trading them. Make sure you have a list of rules and criteria that you have written out for yourselves when it comes to entries, stop losses, and targets. Backtesting is extremely important.
Mondays can be quite slow. However, let's see what happens throughout the London and New York session.