What is Order Block?

❑OBs are candles where market makers (Banks) have placed

❑OB is a Down/Up Candle close before the move Up/Down.

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 There are 2 types of order blocks:
1. Bullish order blocks
2. Bearish order blocks

•Down close Candle is a Bearish Candle

➢Bullish Order Block [BuOB] is down close candle before the move up
➢Bearish Order Block [BeOB] is up close Candle before the move down

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 Bullish Order Block

▪The Bullish order is the last Bearish candle before the bullish movement, that
break the market structure higher.
▪Let me try to frame out in other way, OB’s The last down close candle or
series of consecutive down close candles before an impulsive expansion move
higher
▪The last down close candle (s) in a swing low at support level
▪IPDA will refer back to these levels to mitigate and/or add positions
▪High probability order blocks are accompanied with a FVG beside it
▪High probability bullish order blocks have liquidity resting above it

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3 Key Levels of the bullish order block

High
Open

Mean threshold (50%-Body)

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Bullish Order Block

Support Level

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 Bullish Order Block

BMS

Buy Entry
The Bearish Candle
Before The Bullish
Movement, t h a t
BMS Higher

SL b el ow t h e OB

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 Hint: For a Risk Entry Type;

•If the BuOB is not wicky, we place our Buy Limit at the highest
price and Stop Lose [SL] at the lowest price of the candle.

• If the BuOB is wicky, we place our Buy Limit at the open of the
body and SL at the lowest price

•Reverse everything for BeOB

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 IMBALANCE [IMB]
•This is Insufficient Trading in the market. Sometimes
called Liquidity Void [LV].

•When there is insufficient trading in the market, the

•Imbalance is created by 2-3 or more Extended Range

•ERC candle often closes at 80% of the candle range

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 Exhibit:
•When we have 2-3 or more bullish candles rallying, this shows
insufficient trading. i.e. there were less sell orders to be paired with
buy orders

Assumptions;

✓When the Market Maker [MM] want to move price up at a certain level, it is
assumed that, there should be enough sell orders to pair their buy orders with
(this is how they make profit).
✓So, when the MM moves away from a given level with strength and magnitude,
leaving behind a LV (IMB), we can use this to assume that sell orders that were
available at that level were not enough to pair with their Buy Orders.
✓Therefore, the MM will, often, come back at this level for mitigation

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 MITIGATION
Mitigation means; to reduce risk.

•When the MM moves price away from a level with strength and magnitude, say
they are buying; it is assumed that they are enticing retail traders to join the
move.
•And because most retail traders are price chasers, they join the ride with their
Stop Loses [SL] set. This is the reason (assumed) that the MM will come back to
clear retail traders SL. When their (Retail Traders) SL are hit, they are knocked out
of the move, hence MM mitigating their risk (THEY WILL RESUME THE INITIAL
TREND HENCE MOVING ALONE).

NOTE;
✓Mitigation is not a must thing after imbalance trading in the market because this will
always depend on how much profit the MM has made.

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 Hint:
•To know that the MM are mitigating, there are a number of things you need to
consider.
•For instance, the LV must accomplish some tasks before validating the OB.

Exhibit:

For Instance;
To validate a BuOB with a Bullish LV;
1) LV should take out opposing OB or
2) LV should Break Out Market Structure or
3) LV should Create Equal High EQL. This is valid IFF the price is bouncing from HTF BuOB
(For Reversal Entry) or a trading market (for re-entries)

NOTE; HTF OBs are more effective than LTF OBs, especially when these conditions are met

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 THE OB MUST TAKE OUT AN OPPOSING OB

All the Details i have explained in this documents [VICE VERSA

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 THE CONFLUENCE
Here, you want to come up with your own set of rules (confluence) so that
you confirm them before engaging the market.

Regarding the above features of OBs, How would you consider as your top 2
confirmation?

Well, it’s upon you to make practice and choose the trading method that
suits you. Hint: When trading this method, be sure to stick to your Time
Frame Matrix [TFM] depending on the type of trader you are;
BIGGER PICTURE TIMEFRAME CONFIRMAITON TIMEFRAME ENTRY TIMEFRAM

MN WK D1

WK D1 H4

D1 H4 H1

H4 H1 M15

H1 M15 M5/M3/M1

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Exhibit:

For instance, take H4 – H1 – M15

If price is respecting H4 BuOB, mark the opposing valid H4 BeOB (This will be
your range)
Now you are going to trade within this range…i.e. Look for bullish alignment
on H1 TF with entry confirmation on M15 BuOB.
This method is valid if and only if the price has not reached opposing BeOB.

All the Details i have explained in this documents [VICE VERSA

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