VOL NO.
04
ICT
CONCEPTS
ORDERBLOCKS
In this volume, we will discuss about orderblocks.
( P.S: If you can't see what's writen on the pictures, you can zoom in by
holding CTRL+ mouse scroll )
What is a ICT order block?
Bullish ICT order block:
The lowest candle with a down close that has the
most range between open and close and is near a
"support" level.
Bearish ICT order block:
The highest candle with a up close that has the most
range between open and close and is near a
"resistance" level
Wait for price to give an indication that larger orders
are comming into the market, there should be a strong
reaction towards the opposite side once price reaches
an important "resistance" or "support" level.
P.S: By "support"
and "resistance" level,
you must understand
liquidity point.
2
When is it validated ?
The orderblock is
validated when the
high of the lowest
down close candle (for
a bullish order block)
or the low of the
highest up close
candle is traded
through (for a bearish
order block) by a more
recently formed
candle.
Ideally the best
bullish orderblocks will
not see price trade
below the mid-point (
which is called "mean
threshold", we will talk
about it later) of the
candle, or trade above
it for the bearish
orderblock.
You can use the fibbonacci tool to measure the
open and close of the candle, the mean threshold is, to
keep it simple, the 50% of the candle.
It is recommended to only use the bodies of the
candles and not the wick because bodies are what
contains the pure data. As everyone uses different
broker and exchanges, wicks can sometimes be
unreliable, but it's not always the case - wicks can be
used, but in this case, we want the best of the best, so
we use bodies..
3
Price may run away from the order block if it's valid,
often there is a strong reaction so you need to be
patient for it to retrace its move and retest the order
block.
This is an indication that there is displacement in the
marketplace.
This is also the evidence that there is institutional
sponsorship behind the move.
Displacement may also leave behind another POI, the
"Fair Value Gap" (FVG), we will talk about it later.
4
How I enter on orderblocks ?
Entry and risk
When price impulsively moves away from the
bullish/bearish orderblocks, it may retrace after the
displacement which can offer a buying or selling
opportunity as price returns to the open of the
Bullish/Bearish orderblock candle.
Target the buy stops above/sell stops below the
marketplace as your first TP or full TP.
The low of the bullish orderblock or high of the bearish
orderblock is a relatively safe stop-loss placement.
This is the first of the 7 block types from ICT
