Ultimate Guide To Understanding Order Blocks
Order blocks are specific candles or bars that when properly viewed in institutional context can highlight smart money buying and selling. Order block are very specific levels that can be refined to lower time frames to exact price levels. The higher time frame institutional order flow is critical to selecting high probability Order blocks to trade on. There are bearish and bullish order blocks explained below.
BULLISH ORDER BLOCK
Bullish Order Block is the last bullish candle before a strong move to the down side forming a peak formation low or lower low in an institutional order flow. When price breaks that level up side, it’s called a bullish order block breaker. The movement upward is a bullish move from a Peak Formation Low on yesterday, weekly and monthly lows
BEARISH ORDER BLOCK
Bearish order block is the last bearish candle before a strong move to the top forming a Peak Formation High or Higher High in an institutional order flow. When price breaks that level downward, it’s called a bearish order block breaker. The movement downward is a bearish move from a peak formation high on yesterday, weekly, monthly highs.
STEPS FOR IDENTIFYING BULLISH OR BEARISH ORDER BLOCK
- Peak formation high or low.
- Price on yesterday’s high or low , weekly high or low.
- Hesitation quarters point, or whole number quarters point of the Quarters theory.