Order block
An order block is a specific candlestick or group of candlesticks where institutional buying or selling occurred, often preceding a significant price move.
An order block is identified by a specific candlestick pattern where large institutional orders were executed, causing a temporary price consolidation before a sharp directional move. These blocks represent areas where smart money entered the market, often appearing as the last down-candlestick before an up-move, or the last up-candlestick before a down-move.
Retail traders often use order blocks as potential entry or exit points, anticipating that price may return to these zones before continuing the original move. Identifying these areas can help refine stop-loss placements and target levels, improving risk-reward ratios. This strategy aims to align with institutional flow, reducing the risk of being on the wrong side of major market shifts.
Enseñado en estas lecciones
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