The Ultimate Order Block Trading Strategy (FULL Masterclass) | SMC

if you're anything like 99% of people trying to trade order blocks then your trades probably look something like this everything looks great got an order block set up you get tagged into your entry everything looks like it's going well and then out of nowhere for no reason known to you you just get stopped out so that's an issue you're facing and in this video I'm going to be sharing how to actually find profitable order blocks that work in this video I'm going to be sharing four key things number one what is an order block number

two how to identify an order block number three what are the three things that I look for when hand selecting an order block and finally number four I'm going to be sharing with you the exact stepbystep strategy that I personally use on a consistent basis that is proven profitable without further Ado let's go ahead and get into it an order block is essentially an a of price where there are large resting orders waiting to be triggered and so when you see price trade into these areas into these order blocks you will be expecting to have

some reaction out of that order block now the key is in selecting the correct order blocks okay so how do we actually identify an order block here's what you want to be looking for essentially you want to to find number one the first thing is where do you see a large amount of volume kick into the market essentially that can be identified as a very aggressive candle either in One Direction or the other so for this example of identifying a bullish order block we can see that we have this aggressive bullish candle that moves to

the upside from there on out what you want to be identifying is this final candle just before that impulsive move right we call this the sell to buy candle this is what is going to be characterized as your order Block it's essentially the area of price that first sells into the buy and then we have the aggressive move out of it now to identify this your order block should always have a fair value Gap ultimately an area of imbalance what we can see here is this first candle right here followed by the second impulse bullish

candle right here and then we have one more bearish candle now the key here is to notice that the first candle the wick the highest Wick of the first candle right in here does not meet with the third Wick right so we have one candle two candles three candles this Wick does not meet this Wick and that leaves a gap right a fair value Gap if you can notice a fair value Gap then the likelihood is there is an order block somewhere around that level and how you identify that is you're just going to use

the final down candle before that up candle in a bullish order block scenario or what you can do is if you want to identify a bearish order block essentially what you want to be looking for is the final Buy before you have the aggressive sell candle but remember the candles of the first and third must not meet in this scenario right here you can see very clearly that this first candle and this candle right here they both touch each other therefore that does not give you a fair value Gap therefore that does not give you

a bearish order block so if we can just continue playing price out what you will notice is we have a buy candle in here right and then we have a cell candle then we have another cell candle and then we have a third cell candle now again we want to be identifying this candle right here and this candle right here that is essentially your fair value Gap and wherever there is a fair value Gap there is going to be an order Block in there somewhere and so how we want to identify that is just looking

at the final buy to sell candle that forms just before the aggressive momentum and what you can do is you can use the bottom Wick of this and the top Wick of this and that will create your bearish order block okay so here are my three rules that I go to when I'm trying to Mark out high probability order blocks so rule number one and arguably the most important rule is you must be Pro Trend time and time again Traders are trying to trade bearish order blocks when the order flow is bullish it makes no

sense so make sure that you have this external swing structure aligned like this and you can see that price makes low high higher low meaning this low here is higher than the previous low and then we have a higher high so at that point it's already indicated that price is bullish we have this bullish breakout structure like so and then price is going to respect this area in here and I can guarantee you there is some type of order block inside of here that price then is able to react from so that is number one

make sure you are PR Trend number two is you want to wait for some sort of run on liquidity from that sell to buy level so what we can see here is we have this bullish structure and then as price pulls back you can see it puts these internal lows in now notice that this Final sell right here this Final sell to buy actually causes a run on liquidity so we actually run on the lows in here right so we have a Liquidation in here so you want to see a run on some sort of

liquidity before that order block is formed and then don't forget make sure that this order block this sell to buy has a fair value Gap from candle one to Candle three there's your fair value Gap great now you know how to identify your order block now final one and my golden rule number three is make sure that that order block was something that led to a break of structure that order block itself doesn't have to break structure but there has to be a break of structure in that price leg for example what we see right

here is now we are bullish right we have our swing low down here and we have our swing high up in this region so as long as we stay inside of that price leg this order block is valid but if we do something like this for example let's say we now pulled back like this and then we went and did higher high and we had a new break of structure well this order block no longer becomes valid what we'd actually be then looking at is probably some sort of sell to buy inside of this price

Le in here that leads to a break of structure so make sure that the break of structure has a order block inside of make sure the order block you're looking for has a break of structure inside of it so from there there's the three rules on how to identify the order block and if you have something like this where you you have a prot trend move right we have higher highs higher lows higher highs price pulls back gives a run on liquidity this bearish sell to then buy gives the engulfing candle and then break some

sort of structure that is a high probability area for price to then be able to come back to something like this before putting in some sort of high high and this is exactly where you would trade from so let's take a look at what this order block scenario looks like in the markets themselves here we are and what we can see right here is that price is bullish so step number one is where is your directional bias you can see we had this low in here puts in a high price pulls back right respects what

respects the previous bullish order block that we were talking about and then what does price do price then has this aggressive move out of this price range breaks structure right we have a break structure to the upside like this so there we have our prot Trend we are trading with the trend we have our break of structure that was come from this bullish order Block in here and then finally what else do we have we have our run on liquidity right you can very clearly see that we have a old low in here then we

have this Final sell into this liquidity relative equal lows sell into liquidity and then aggressive buy out so we've ticked all three boxes we're prot trend right we're clearly in a bullish Trend we have taken a run on liquidity and then we've broken structure so that means that our order block is inside of the structural price leg that we're currently trading inside of our current trading range then what you can do is you can map out your area of order block your bullish order block and then you can just wait and see how price reacts

so you can see price has a reaction a bullish reaction drops down deeper to m and then begins aggressively advancing out of that level and takes out the continuation right another break of structure just continuing in the overall trend that price is currently trading in now we're going to take everything that we've just learned about the basics of order blocks and we're going to apply that into my step-by-step profitable order block trading strategy I'm going to give you exact rundown of a trade that I took using the exact strategy that I'm going to be sharing

with you okay so now let's walk through this trade on Euro US doll during London session so first thing I'm going to do is I'm going to switch on my session indicator this allows me to outline the exact sessions so you know that this is Jo in the London session now step number one is we need to identify what is the trend Direction and so you can very clearly see that price was aggressively bearish we put in a lower low a lower high a lower low giving us a break of structure to the downside followed

then by a change of character so you can see we've changed the trend here we were indeed bearish put in a series of lower lows and then we've put in a higher high meaning this high that we've just placed in here is higher than the previous High therefore we have now shifted bullish so we no longer want to be looking at any bearish order blocks anything of that nature we want to be paying attention to the present moment Trend right so we want to make sure that we are trading inside of this trading range so

our bias is indeed bullish we are looking to take long positions now step number two is I need to find an order block that makes sense to trade from right and this is going to be my point of Interest my higher time frame point of Interest right so what we're want to be looking at is this particular session in here this is Asia in this blue box from here it's from 8 till midnight EST this represents the Asia session range now as you guys know the highs and the lows of this Asia session range are

extremely liquid so what we want to see is coming into our London session we want to have a clear directional bias which I have I am bullish I want to have a clear point of Interest below Asia session low if I'm buying I want to be buying below that Asia session low right so where in here can you see that we have a clear area of order block well you can see very clearly in here right this Final sell to buy candle that has a fair value Gap you can see the first candle in here

does not meet with the third candle in here that is our clear and obvious fair value Gap you can see that it runs an area of liquidity right so the Final sell runs the previous candle's low which is a run of liquidity and then we have this aggressive push out it's inside of the area it's ins inside of the prot trend move right we've already had our break of structure this order block is inside of that break of structure price leg and what we want to see is price all back liquidate Asia low Drop into

here and then when I get into this area I don't want to just take a risk entry on here right and besides even if I was to take an entry on here and Target our Target which is our Asia session High that's going to give me 3.3 R reward which might seem decent to a lot of you guys but some of you who know and have been around here for a long time you know that my minimum risk to reward is one 125 right so what I want to do is I want to get into

this area then I want to drop down to the one minute time frame and then I want to take my entry there so let's see how that plays out first thing is waiting for price to get into this area and there is the objective complete right we have equal lows in here we have Asia low in here which is a prime area for a sweep on liquidity we've now run the liquidity we have our point of Interest we are prot Trend looking for buys time for our entry confirmation so what we're going to do is

we're going to drop down to the one minute time frame and now we need to establish what is our directional Trend at the moment so you can quite clearly see that we are bearish right we're in this heavy downtrend and we can see that this was our swing low price pulled up swing High then we went lower low right lower low lower high and what you can just notice price has just what run on liquidity this low this low that was supporting this bullish move up has now been liquidated so what we would need to

see is a reignment a market structure shift Above This high displacing this high and then that would be our confirmation the one minute time frame is now ready to go in the same direction as that 30 minute time frame so if we just play price out there is your displacement right there's your Market structure shift and your displacement price is putting in a series of lower lows lower highs liquidation of the low run of the high giving us a realignment displacing above the previous high and now what do we want to see we want to

see an area of demand we want to see bullish order block so what do we need to see well we need to see this move right here this sell to buy the breaks structure that's coming from our higher time frame point of interest that has taken an area of liquidity right any low or any High an opposite example is a run of liquidity but not only is this a run of liquidity this down here is also a key run on liquidity so we had a run on liquidity here price pushes up reacts to this bearish

order block pushes down and then buyers outweigh the market giving us a sell that liquidates price and then break structure to the upside now we just want to look at this as our bullish order block you can see has F value Gap Candle One Candle three doesn't meet we have a f value Gap that is where we want to look at taking our position from going to put our stop loss below this low in here and I know what you're thinking that is a pretty tight stop loss and it is so let's continue and see

where are we going to take this trade to well we want to always be trading in alignment with the trend so if we know that we're bullish we want to just take price to the next logical high that makes sense so we want to go for a minimum of 1 to five right so there's our 1 to five there is our displacement now it's time to enter and this is where we're going to be entering from so price continues trading continue trading higher price ranges okay price is now at this point creating what creating a

range what do we understand about ranges in price a range in price is creating liquidity on both sides of the market so when you see a range occur like this that is ultimately building liquidity on the buy side and on the sell side and what you'll see a lot of times happen is you'll see a run first on the buy side liquidity inducing all of these buyers everybody is now looking to buy because everybody's perceiving this as a breakout and then price runs the actual liquidity that it wants to run and then goes into it

the direction that it really wants to trade into so pay attention for that schematic right there when we break this down right what do we see we have equal highs across here okay price runs the equal highs what do we have across here we have relatively equal lows so price has now run the buy side of the liquidity okay now it's created what more equal lows across here stacked lows equal lows here lows here again running buy side liquidity so this trade becomes invalid if we break this high if we hit the take profit before

we have been tagged in obviously this trade then becomes obsolete there's no need to take it anymore however if it doesn't then we still trade it as is so there you can see there is the aggressive liquidation of this low and here there's your liquidation so at this point price may or may not tag you in again just keeping the order open so price does tag in and if for whatever reason you would have removed your order then you can pay attention to the details by reconfirming this area of price because what do we notice

in here well you can see as price pushes up right and then break structure these tiny little swing points are dictating the order flow and so you can see that price is printing this lower internal Trend right even again you can see it's printing this lower internal Trend we have low high lower low lower high lower low low high liquidation and then what do we have it's the exact same thing over and over and over again right so we have had no break of structure yet so we would need to see some sort of break

of structure but there when you have your break of structure what do you now have right again price I'm going to zoom in to pay attention to detail right again these are the little details that people Overlook what do we see we see that price is printing lower lows lower highs lower lows lower highs lower lows liquidation higher high right there is our order block our bullish order block that break structure number one it breaks structure it liquidates and it's aligned with the overall trend so if for whatever reason you wasn't able to capitalize on

the original move you can put another position in I would cover the same stop right so stops on this same low in here just in case it does want to come a little bit deeper and then where do you target you just looking at the exact same area because the bias is to take price into this area that's a one to six .85 then keep playing price out so price aggressively moves out of this level and then eventually price runs to full take profit with two potential profitable positions one for one to five risk reward

and one to 6.85 risk to reward