What Are Order Blocks?
Order blocks are price zones where a significant number of market orders are placed, creating strong levels of support or resistance. These areas indicate institutional activity and are often used by traders to predict price movements.
How to Determine the Strength of an Order Block
The strength of an order block depends on its volume, which is analyzed similarly to Fair Value Gaps (FVGs).
Volume Analysis for Order Blocks
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Bullish Order Block:
- High Volume: Sum of the last two bars’ total volume.
- Low Volume: The oldest bar’s volume.
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Bearish Order Block:
- Low Volume: Sum of the last two bars’ total volume.
Understanding these volume dynamics helps traders gauge the reliability of an order block before making trade decisions.
Tutorial Videos
Learn more about order blocks with these video tutorials: