🔴 1-2-3 ORDER BLOCKS Trading Strategy Banks Don’t Want You To Know About

in this video I've created The Ultimate Guide to mastering order blocks we'll cover everything from the basics to Advanced Techniques whether you're just starting out or already an experienced Trader make sure to watch the whole video to fully grasp each concept I'll also Share three high probability trading strategies using order blocks by the end of this guide you'll have a solid understanding of how to use order blocks for consistent profits um this video is a complete Master Class on trading with order blocks let's jump in and go over the topics covered let's start by understanding

what an order block is an order block is a key Zone on the chart where a large amount of money has been traded Often by big institutions or Banks also known as smart money because they trade with huge Capital their actions can create noticeable price movements so when you see a sharp price move from a certain area like this one it might be a sign that smart money has made a move large buy orders push the price up quickly and the area where these trades happen is called an order block there are two types of

order blocks bullish order blocks which are created by large buy orders and bearish Order blocks created by large sell orders in this video I'll show bullish order blocks in blue and bearish Order blocks in purple but you can use any colors you prefer once you've identified an order block it can create potential Trading opportunities because the price often retests and bounces when it hits hits that area for example if you had bought at the order block here you could have made some good profits now you might be wondering isn't this the same as support and

resistance well both order blocks and support resistance are important levels they aren't the same there are some key differences between the two the first difference is how they are formed order blocks are created when there's a sign ific price movement from a specific area for example if the price moves sharply from a point you can mark it as an order block on the other hand support and resistance levels form after multiple price rejections if the price gets rejected at a certain level once and again at the same spot later you can mark that as a

support or resistance level the second difference is how they are drawn on the chart order blocks are usually shown as thick zones or areas while support and resistance levels are typically drawn as thin lines even if support and resistance are drawn as zones they're much thinner than order blocks the third difference is how often they are retested order blocks are usually a one-time use level once the price retraces to the order Block it's done and can't be used again in contrast support and resistance levels can be retested multiple times although order blocks and support resistance

are different they can be used together for example if an order block forms at the same time the price is near a resistance level this is called a Confluence finding a setup with Confluence is ideal because the price has a higher chance of reacting to that area um before we can start trading with order blocks we need to know how to identify them correctly earlier I mentioned that if the price moves sharply from a point you could mark it as an order block but it's not that simple a big price move doesn't always mean there's

an order block there are specific rules to follow to confirm whether an order block is valid here are the three important rules for identifying a valid order block these rules are crucial because you won't be able to trade the strategy successfully without understanding them rule number one for a price move to be classified as an order block it must create a gap afterward this Gap is often called inefficiency or imbalance whenever you hear these terms there is simply referring to a gap let's look at an example to make it clearer we have two similar upward

price movements however notice the key difference on the left there's a gap between the first candle's upper Wick and the third candle's lower Wick while on the right the Wicks intersect with the candle bodies so there's no Gap this Gap is what we call inefficiency or imbalance even though both setups show significant upward movement only the left one is a valid order block because it has inefficiency to draw the order block take the first candle before the inefficiency and draw a rectangle from the top Wick to the bottom Wick rule number two an order block

must be unmitigated order blocks are typically a one-time use level if the price touches an order Block it's no longer considered valid meaning it can't be retested for example if you spot a gap or inefficiency and draw an order block but then see the price or even just a wick touching that order Block it's no longer valid because it's been tested while there are strategies to reuse a tested order block I'll cover those later in the video for now just remember that an order block is generally only usable once rule number three the most important

rule is that an order block must lead to a break of structure or a change of character afterward if you're not familiar with these terms don't worry I'll give a quick recap let's simplify this markets move in Trends either uptrends or downtrends in an uptrend the price doesn't go straight up it moves in a structured way creating what's called higher highs and higher lows higher highs means each High Point is higher than the last one and higher lows means each low point is also higher than the last in a downtrend it's the opposite the market

forms lower highs and lower lows where each high is lower than the previous one and each low is also so lower in an uptrend when the price breaks above a previous high and creates a new high that's called a break of structure but Trends don't last forever eventually the market will change direction this shift happens when the price breaks below a previous low and forms a lower low this is known as a change of character because it signals a shift from an uptrend to a downtrend the same cycle happens in a downtrend the price makes

lower highs and lower lows and when it breaks previous low that's a break of structure if the price breaks above a previous high and forms a higher high during the downtrend that's another change of character signaling a shift back to an uptrend so that's a quick breakdown of what break of structure and change of character mean in market trends um so how does this all connect to order blocks for an order block to be considered valid it must lead to either a break of structure or a change of character afterward let's look at an example

in this chart we see a strong upward move along with a gap also known as inefficiency which suggests a potential order block but we can't just Mark the order block immediately we first need to see if the market creates a break of structure or a change of character once the price finally breaks above the previous High creating a break of structure we can then draw our order block on the first candle before the inefficiency similarly we see another significant upward move within efficiency followed by a break of structure when the price forms higher highs which

confirms another valid order block we can draw uh let's go over another example in this chart the price is creating higher highs and higher lows and we have a potential order block here due to the inefficiency however since the price hasn't made need a new higher high yet we can't consider this a valid order block after some time the price moves down and forms another possible order block but this time it's a bearish one we see a significant downward move with inefficiency on this red candle then the price breaks the previous lows forming lower lows

this break counts as a change of character because the market has shifted from an uptrend to a downtrend now we'll focus on the most recent bearish order block as it aligns with the new downtrend the earlier bullish order block isn't valid because the price didn't create higher Highs but the bearish one is valid since it led to a change of character in this video we'll explain order blocks in a simple way first we see the price moving up significantly along with some inefficiency which could suggest an order block however because there hasn't been a break

in the structure yet this order block isn't valid for now later the price moves down and then back up creating more inefficiency indicating another potential order block this time the price makes higher Highs but within a smaller structure making it a valid order block for that structure if we zoom out we can also see the price made higher highs in the larger structure meaning the earlier potential order block has now become valid too so when drawing order blocks it really depends on the structure you're looking at to recap the three rules to identify a valid

order block are one it must create a gap also called inefficiency or imbalance two it must remain untested or unmitigated three a break of structure or change of character must happen afterward learning to spot order blocks is a great skill but the real fund starts when you apply them to your trading strategy now I'm going to reveal three order block strategies that can elevate your trading strategy one multi-timeframe confirmation for this first strategy start by identifying an order block on a higher time frame in this example we're using the USD 4our chart we notice two

key price movements one going up and the other going down both movements show inefficiencies meaning we have two possible order blocks one bullish and one bearish but we need to confirm if these order blocks are valid for the bull bullish order block the price moved upward with inefficiency but it didn't create a clear break in structure also the price retested it so it's no longer unmitigated for the bearish order block the price made lower lows creating a break in structure and it's unmitigated So based on this analysis only the bearish order block is valid once

you've identified the valid order block wait for the price to retrace back to that level when the price touches the order block move to The Next Step confirmation we need to confirm if the price will bounce off this order block to do that switch to a lower time frame like the 15-minute chart on the 15-minute chart look for signs of bearish momentum to see if the price will reverse from the order block you can use various confirmation tools such as indicators like the macd bearish Candlestick patterns or a change in Market structure my favorite confirmation

tool is the bearish engulfing Candlestick pattern pattern it's simple but effective a bearish engulfing pattern occurs when a smaller bullish candle is followed by a larger bearish candle that completely engulfs the previous one signaling a potential reversal once you spot this pattern open a sell position after it forms place your stop loss just above the order block and set your take profit at 2x the size of your stop- loss this strategy can lead to strong profits here's a cheat sheet for using multiple time frames if your high time frame is the weekly chart use the

4H hour chart as your low time frame if your high time frame is the daily chart use the 1 hour chart as your low time frame if your high time frame is the 4our chart use the 15minute chart as your low time frame if your high time frame is the 1H hour chart use the five minute chart as your low time frame and that's all you need for strategy one strategy two inducement traps an inducement trap is a setup where a smaller key level forms near a major order block for example imagine a major order

block forming below and a minor key level forming above it this minor key level often referred to as an inducement may experience multiple rejections the strategy is called an inducement trap because in many cases the price breaks through the minor key level only to retrace down to the main major order block before reversing back up traders who bought the minor key level expecting a bounce are often stopped out when this happens to use this strategy when you spot a minor key level above a major order block you can place a buy order in the middle

of the major order block your buy order will only be triggered if the price touches the order block giving you a high reward trade if the price doesn't reach the order block no position is opened and there's no risk while this setup may seem random it's actually quite common and there's a logical reason it works large institutions or smart money want to enter the market at an ideal price but because of their massive Capital they can't do so without moving the price unlike retail traders who can enter positions easily large institutions face the problem of

pushing the price up if they buy all at once um which makes their entry price higher to avoid this they use inducement levels after creating an order block they push the price back down to the order block by triggering the stop losses this is of traders who bought the inducement level expecting a bounce these stop losses often sit just below key levels so only a little selling pressures needed to trigger them causing more selling this allows the institutions to re-enter at the lower price driving the price back up now let's look at a real example

in this chart the price moves sharply upward creating inefficiency in Breaking the structure which makes this a valid order block after the upward move we see an inducement Zone where the price forms multiple rejections at a support level since there's a major order block below and a minor support level near it this could be a potential inducement trap in this case we place a limit by order in the middle of the order block and wait as expected the price moves downward breaks through the inducement level and triggers our buy order at the order block once

the order is triggered we set a stop loss just below the order block and aim for a take profit that's two to three times the size of the stop loss you could also Target the inducement zone for your takeprofit as you can see this trade turned out to be profitable strategy three breaker blocks in the beginning of this video we talked about how order blocks are usually used only once however there's a way to take advantage of broken order blocks and this technique is called breaker blocks so what is a breaker block a breaker block

is a previously valid order block that has been broken by the price once this happens the price May retrace back to that level which can then act as a resistance Zone where the price might reject again this gives us a chance to enter a short position at the breaker block keep in mind that breaker blocks are typically only effective once after the price breaks and retests the level its usefulness usually ends let's break down an example in this chart the price moves sharply upward creating inefficiency and making higher highs this allows us to mark an

order block however the price then moves downward breaking the order block this also causes a change in character meaning the trend has shifted from bullish to bearish as the price breaks below previous lows as the price retraces back toward the previous order block this level now acts as a potential resistance Zone this is an ideal area to open a short position place your stop loss just above the breaker block and set your take profit at twice the size of the stop loss in this example the price rejected the order block hit our Target and resulted

in a solid profit now that you know these strategies it's time to put them into action however if you're a total beginner with no trading experience I recommend starting with a simpler strategy to help you get started with order blocks trading I've provided the order blocks allinone indicator that you can easily use on your trading platform the order blocks allinone indicator marks different types of order blocks on your chart like unmitigated mitigated and breaker blocks this helps you see the market structure more clearly by showing these areas as as colored boxes with labels making it

easier to spot potential reversal or continuation zones in this video I've also included a template that you can upload directly to your chart it will automatically set everything up for you so you don't have to worry about it you can find the down Link in the description check out my other video where I explain an easy strategy that any beginner can use to start making consistent profits thanks for watching and I'll see you in the next one [Music]