Order Block Matrix [Alpha Extract]

May 11

The Order Block Matrix indicator identifies and visualizes key supply and demand zones on your chart, helping traders recognize potential reversal points and high-probability trading setups.

This tool helps traders:

• Visualize key order blocks with volume profile histograms showing liquidity distribution.
  
• Identify high-volume price levels where institutional activity occurs.
  
• rank historical order blocks and analyze their strength based on volume.
  
• Receive alerts for potential trading opportunities based on price-block interactions.
  

🔶 CALCULATION
The indicator processes chart data to identify and analyze order blocks:
Order Block Detection

Inputs:

• Price action patterns (consolidation areas followed by breakouts).
  
• Volume data from current and lower timeframes.
  
• User-defined lookback periods and thresholds.
  

Detection Logic:

• Identifies consolidation areas using a dynamic range comparison.
  
• Confirms breakout patterns with percentage threshold validation.
  
• Maps volume distribution across price levels within each order block.
  

🔶Volume Analysis

Volume Profiling:

• Divides each order block into configurable grid segments.
  
• Maps volume distribution across price segments within blocks.
  
• Highlights zones with highest volume concentration.
  

Strength Assessment:

• Calculates total block volume and relative strength metrics.
  
• Compares block volume to historical averages.
  
• Determines probability of reversal based on volume patterns.
  

isConsolidation(len) =>    high_range = ta.highest(high, len) - ta.lowest(high, len)    low_range = ta.highest(low, len) - ta.lowest(low, len)    avg_range = (high_range + low_range) / 2    current_range = high[1] - low[1]    current_range <= avg_range * (1 + obThreshold)

🔶 DETAILS
Visual Features

Volume Profile Histograms:

• Color-coded bars showing volume concentration within order blocks.
  
• Gradient coloring based on relative volume (high volume = brighter colors).
  
• Bull blocks (green/teal) and bear blocks (red) with varying opacity.
  

Block Visualization:

• Dynamic box sizing based on volume concentration.
  
• Optional block borders and background fills.
  
• Volume labels showing total block volume.
  

Screener Table:

• Real-time analysis of order block metrics.
  
• Shows block direction, proximity, retest count, and volume metrics.
  
• Color-coded for quick reference.
  

Interpretation

• High Volume Areas: Zones with institutional interest and potential reversal points.
  
• Block Direction: Bullish blocks typically support price, bearish blocks typically resist price.
  
• Retests: Multiple tests of an order block may strengthen or weaken its influence.
  
• Block Age: Newer blocks often have stronger influence than older ones.
  
• Volume Concentration: Brightest segments within blocks represent the highest volume areas.
  

🔶 EXAMPLES
The indicator helps identify key trading opportunities:
Bullish Order Blocks

• Support Zones: Identify strong support levels where price is likely to bounce.
  
• Breakout Confirmation: Validate breakouts with volume analysis to avoid false moves.
  
• Retest Strategies: Enter trades when price retests a bullish order block with high volume.
  

Bearish Order Blocks

• Resistance Zones: Identify strong resistance levels where price is likely to reverse.
  
• Distribution Areas: Detect zones where smart money is distributing to retail.
  
• Short Opportunities: Find optimal short entry points at high-volume bearish blocks.
  

Combined Strategies

• Order Block Stacking: Multiple aligned blocks create stronger support/resistance zones.
  
• Block Mitigation: When price breaks through a block, it often indicates a strong trend continuation.
  
• Volume Profile Applications: Higher volume segments provide more precise entry and exit points.
  

🔶 SETTINGS
Customization Options

Order Block Detection:

• Consolidation Lookback: Adjust the period for consolidation detection.
  
• Breakout Threshold: Set minimum percentage for breakout confirmation.
  
• Historical Lookback Limit: Control how far back to scan for historical order blocks.
  
• Maximum Order Blocks: Limit the number of visible blocks on the chart.
  

Visual Style:

• Grid Segments: Adjust the number of volume profile segments.
  
• Extend Blocks to Right: Enable/disable extending blocks to current price.
  
• Show Block Borders: Toggle border visibility.
  
• Border Width: Adjust thickness of block borders.
  
• Show Volume Text: Enable/disable volume labels.
  
• Volume Text Position: Control placement of volume labels.
  

Color Settings:

• Bullish High/Low Volume Colors: Customize appearance of bullish blocks.
  
• Bearish High/Low Volume Colors: Customize appearance of bearish blocks.
  
• Border Color: Set color for block outlines.
  
• Background Fill: Adjust color and transparency of block backgrounds.
  
• Volume Text Color: Customize label appearance.
  

Screener Table:

• Show Screener Table: Toggle table visibility.
  
• Table Position: Select positioning on the chart.
  
• Table Size: Adjust display size.
  

The Order Block Matrix indicator provides traders with powerful insights into market structure, helping to identify key levels where smart money is active and where high-probability trading opportunities may exist.

Release Notes

Major Fixes:
1. Window Mode Implementation

Added windowsis = true and mswindow = 1000 to process only the last 1000 bars
This directly addresses the max_bars_back limitation that was causing issues on lower timeframes
Only processes bars within the window range: inWindowRange = windowsis ? bar_index > (last_bar_index - mswindow) : true

2. Removed Complex Lower Timeframe Processing


Eliminated the request.security_lower_tf() calls that were fetching 15-minute data
Removed the complex multi-timeframe volume calculations that were likely causing performance issues
Simplified from [h_req, l_req, v_req] = request.security_lower_tf(...) to direct volume usage

3. Eliminated Historical Data Scanning

Removed the enableFullHistory and scanned_history logic
Deleted the complex historical lookback loop that was scanning hundreds of bars
This should significantly improve performance when backtesting over months/years

Simplified Architecture:
Volume Calculation

Old: Complex multi-timeframe volume distribution across grid segments
New: Simple volume formatting and direct volume[obLookback - 1] usage

Order Block Generation

Streamlined the block creation process
Removed age-based management and complex overlap detection
Simplified mitigation logic

Performance Optimizations

Window processing prevents excessive historical calculations
Removed timeframe complexity that was causing backtesting issues
Direct volume/price data usage instead of lower timeframe requests

Release Notes

Adjusted a few hardcoded inputs.