Boot Camp Day 20: Order Blocks
Summary
TLDRIn this educational video, the speaker introduces the concept of 'order blocks' in trading, explaining their significance and how they function within market trends. The video is part of a boot camp series, focusing on day one with an overview of order blocks, their formation post-liquidity sweep, and their role in retracement plays. The speaker emphasizes the importance of understanding order blocks for strategic trading, promising further insights on spotting them in subsequent sessions. The summary also touches on the importance of avoiding trades during high-impact news events to prevent unnecessary risks.
Takeaways
- 📘 The speaker is introducing a boot camp focused on learning about 'order blocks' in trading.
- 🎯 Order blocks are significant price movements that precede liquidity sweeps and are where orders get filled, causing a shift in market structure.
- 🔑 Understanding order blocks is beneficial for traders as it helps in identifying accumulation areas and potential retracement points in the market.
- 📈 The concept of order blocks is applicable across all time frames, making it a versatile tool for traders.
- 🚫 There is typically only one order block within a trend as it forms from a liquidity sweep and the start of a new trend.
- 🔍 The speaker plans to teach how to spot order blocks in the following days, emphasizing their importance in trading strategies.
- 📉 Order blocks can indicate potential areas where the market may retrace, providing opportunities for re-entry or new trades.
- 📝 The speaker mentions that there will be no homework for this session, focusing instead on understanding the concept of order blocks.
- 🗓 The boot camp includes a series of days dedicated to different aspects of trading, including psychology and practical application of concepts learned.
- ⏰ The speaker warns against trading during high volatility news events, using GBP/JPY as an example of market movement during such times.
- 👋 The session concludes with a reminder for attendees to join the next session, which will cover psychological aspects of trading.
Q & A
What is the main focus of the boot camp being discussed in the script?
-The main focus of the boot camp is to learn about order blocks, their significance, and how they can be used in trading strategies.
What is an 'order block' in the context of trading?
-An 'order block' is a price range where orders were filled, typically resulting from a move up or down that causes a liquidity sweep, leading to a break of structure in the market.
Why are order blocks beneficial for traders?
-Order blocks are beneficial because they provide a visual representation of where orders were filled, allowing traders to anticipate potential retracements and re-entry points in the market.
What is the relationship between order blocks and liquidity sweeps?
-Order blocks form as a result of liquidity sweeps, where a move up or down takes out a high or a low, causing orders to be filled and potentially leading to a market structure break.
How does the speaker rank order blocks in terms of retracement play opportunities?
-The speaker ranks order blocks as the first point of interest for retracement plays, often providing better entries than liquidity sweeps and break of structure alone.
What is the significance of the number '44' mentioned in the script?
-The number '44' appears to be a personal preference or a reference to a specific item or concept, but its significance is not clearly explained in the provided script.
Why is it important to understand the terminology and concepts like order blocks in trading?
-Understanding terminology and concepts like order blocks helps traders to better analyze market movements, make informed decisions, and develop effective trading strategies.
How does the speaker plan to cover the topic of order blocks in the boot camp?
-The speaker plans to cover the topic over three days: the first day is an overview of why order blocks are useful, the second day is about spotting them, and the third day is about putting the knowledge into practice.
What is the speaker's view on the applicability of order block concepts across different time frames?
-The speaker loves the way they trade because the concepts, including order blocks, are applicable across all time frames, from one-minute to larger time frames.
What advice does the speaker give regarding trading during news events?
-The speaker advises against trading during news events, as illustrated by the example of GBP/JPY's volatility during PPI and FOMC news, to avoid unnecessary risks.
What is the speaker's approach to teaching the boot camp participants about order blocks?
-The speaker's approach involves a step-by-step explanation, starting with the definition and benefits of order blocks, followed by practical examples and strategies for spotting and utilizing them in trading.
Outlines
📚 Introduction to Order Blocks
The speaker begins a boot camp session focused on 'order blocks', a trading concept. They apologize for an unclear start and dive into discussing the importance of order blocks in trading strategies. The speaker explains that an order block is essentially a price movement that triggers a liquidity sweep, which fills orders and shifts market structure. The first day of the boot camp is dedicated to understanding why order blocks are useful, their benefits, and how they act in the market. The following days will cover how to spot order blocks and integrate the knowledge into trading practices. The speaker expresses excitement for the practical application of these concepts in the market.
🔍 Understanding and Utilizing Order Blocks
This paragraph delves deeper into the concept of order blocks, explaining their formation and significance in trading. The speaker clarifies that an order block is the initial move that leads to a liquidity sweep, where orders are filled at a specific price range. The market makers may push the price back into this range to fill more orders, making order blocks a valuable tool for retracement trades. The speaker emphasizes that order blocks are the top priority for re-entry points in trading, as they often offer better entry opportunities than the initial liquidity sweep and break of structure. It's also noted that there's typically only one order block per trend, making them unique and important for traders to identify and utilize effectively.
🚫 Avoiding Trading During High Volatility News
In the final paragraph, the speaker wraps up the session by briefly touching on the importance of avoiding trading during high volatility news events. They use the example of the GBP/JPY pair's movement during a news release, illustrating the significant pip movement that can occur, which can be risky for traders. The speaker advises that understanding when such news events are scheduled can help traders avoid unnecessary risks. They conclude the session by reminding viewers that the next day will cover psychological aspects of trading and hint at the importance of learning from market news events.
Mindmap
Keywords
💡Boot Camp
💡Order Blocks
💡Liquidity Sweep
💡Fair Value Gaps
💡Equilibrium
💡Retracement
💡Market Makers
💡Break of Structure
💡Entry
💡PPI and FOMC
💡GBP JPY
Highlights
Introduction to the concept of 'order blocks' in trading and their significance in market movements.
Explanation of how order blocks are formed as a result of liquidity sweeps and the filling of orders.
The importance of understanding order blocks for identifying market entry and exit points.
The role of order blocks in retracement plays and their comparison to other trading strategies like fair value gaps and equilibrium.
Why order blocks are beneficial for traders to anticipate market movements and potential order fills.
The unique characteristic of order blocks being the only formation within a trend due to their connection with liquidity sweeps.
How order blocks can offer re-entry opportunities in the market after a missed initial entry signal.
The potential for better entry points through order blocks compared to liquidity sweeps and break of structure.
The applicability of order block concepts across different time frames in trading.
The distinction between order blocks and other market structures like fair value gaps, emphasizing their unique role in trading strategies.
The anticipation of future lessons on spotting order blocks and their practical applications in trading.
The comparison of order blocks to accumulation areas, highlighting their similar impact on market dynamics.
A cautionary note on the importance of avoiding trading during high-impact news events to prevent unnecessary risk.
An example of market volatility during news events, illustrating the potential pitfalls of trading without awareness.
The emphasis on the practicality of understanding order blocks for everyday trading, especially on lower time frames.
The speaker's personal preference for order blocks as a primary point of interest for retracement plays.
A reminder that the explanation of order blocks is part of a larger trading strategy series, setting expectations for upcoming content.
Transcripts
are you guys ready for another boot camp
day in the in in the learning
all right sorry
Focus
[ __ ] that might get actually I'm not
even monetized hey
I read my set Jay on 4pf on GDK come up
on my block
wait what the [ __ ] this [ __ ] is wrong
on 4pf J full Pockets foe
faux Pockets faux
what's your go-to order Wendy's
why you wear number 44 because I get
that damn Wendy's Fofo
on GDK on crib on BDS
[Laughter]
all right anyways
let's get into it boot camp day number
I don't [ __ ] know anyways we're gonna
learn about order Cox order blocks today
[ __ ]
all right let's actually Focus we're
gonna learn about order blocks today
um per usual with our little building
block series of our
um strategy we are going to you know the
first day is literally just me talking
about why we want to use them
um why they're useful to us you know
usually a quick little overview of uh
why we're using them what they do how
they act um and how they're beneficial
to us in the market and then day two is
how we can spot them and then day three
is putting it all together and um I'm
honestly really excited for day three
because
um after that I mean I'm honestly more
excited for when we can finish up
equilibrium and then we can start
getting into like you know putting
everything together and we're literally
gonna do like three days in a row of
like it's going to be like day one
putting everything together day two
putting everything together day three
putting everything together and it's
literally just gonna be us on the charts
just like you know like look boom boom
boom boom boom Market flowing off of
everything that we just learned
um but yeah with that being said let's
talk about order blocks let's talk about
what they are let's talk about why
they're beneficial to us so
um what is a order block so if you guys
remember
um when we talked about liquidity sweeps
uh remember right in order for there to
be a liquidity sweep right we have to
either take out a high or a low right in
that and by taking out a high there has
to be a move up and by taking out a low
there has to be a move down you know
prior to the you know break of structure
that ends up Shifting the market
structure right and essentially all in
order block is is that move up that
causes the liquidity sweep
you know and then boom when liquidity
gets swept orders get filled right
that's why it's called an order block
because it's literally like boom the
move up
right this is this whole price range
is where the orders were filled and then
in turn right let's say we had like a
like this was the high or something we
sweep this liquidity or whatever and
then we break structure right on this
move up
right here this is where orders were
able to get filled
right so that's that's essentially what
our order block is and and we'll talk
more um in two days about
uh how we can how can how we can spot
them but essentially that move up or
that move down taking out liquidity
where orders are being filled is our
order block okay so why is this
beneficial to us and why would we want
to know you know why we want to use that
because
one it's just beneficial knowing the
terminology and understanding that hey
this move down or this move up is what
caused those orders to be filled and
that's that move up and that move down
right that that price range is where all
these orders were filled so with that
understanding right we know that okay we
have a little uptrend and then boom okay
right here is where orders were filled
so if price hold on that looks super
shitty
um if price was able to or if the market
makers were able to
fill their orders with this leg up and
within this price range
similarly to how fair value gaps right
they want to push price back within this
price range
right similar to fair value gaps how
they would want to you know push price
back into a price range to fill more
orders to you know either move the
market down further or move the market
up further
um same thing with this so right they
were able to fill short orders within
here so when they start getting buying
pressure again and price starts moving
up they say okay cool we'll push price
right back up because we know there's
going to be people you know willing to
fill even more orders within here right
because literally a couple minutes or a
couple seconds ago or whatever time
frame we're on
right there were there were orders to be
filled within here so what can they do
they can push price back into this order
block right where more resting orders
are waiting to be filled in the opposite
direction right so they can boom fill
their orders boom and send price lower
and that's essentially all in order
block is it's the price range from where
the first orders were filled and then
when we get that retracement on up into
the order block
um
that is where uh that's that's where
they can fill even more orders right
because they were able to fill it before
in this price range they can fill even
more orders to send price boom further
down in that same direction I honestly
like order blocks as I I would rank it
as this so liquidity sweep and break of
structure that's the start of the move
that is
um that's the top of the entry okay fair
value gaps order blocks and equilibrium
are used for retracements right so if we
cannot catch
um
if we can't catch
if we can't catch this liquidity sweep
break of structure entry we can say okay
we have three more options now if we if
we see like okay we missed the liquidity
Suite we miss the break of structure now
we have three more options for a
re-entry for a a retracement play the
first option every single time for me is
going to be an order block
because right it's still at the top of
the move and oftentimes you can get you
know even a better entry than off of
just the liquidity sweep and the breakup
structure right because oftentimes this
low is the very beginning of the order
block and you can you know sometimes get
filled you know within here where where
price wants to retrace to Okay so
with that right Order Box is is always
going to be my very first
um point of Interest or yeah point of
interest uh for for a retracement play
because it's it's the it's still at the
top of the move and oftentimes you can
get even a better entry off of these
um
then you can off a liquidity sweep okay
and then next I would do a fair value
Yap and then after that our equilibrium
and fair value gaps are are pretty
similar
um but something about order blocks that
we need to understand
is there's only one there's only one
order block within a whole Trend right
because they form off of
a liquidity sweep orders getting filled
and then the start of a new trend right
this this trend
this trend right this uptrend got broken
by the liquidity sweep by the break of
structure now we have this order block
within here
right where price can potentially
retrace on up to okay boom and then we
start this downtrend right and then
right there's no other order blocks
within here right because there's right
there's there's fair value gaps there's
equilibrium getting filled and we'll
talk about equilibrium in a couple days
or in like a week or so
um but right there's only one of these
and the next one that gets made is when
boom right when we get another Trend
shift okay so where's our order block on
this it's the it's the leg down prior to
the liquidity sweep
boom and what and we'll talk about you
know how to spot these tomorrow I'm just
trying to help you guys visualize this
but you know this is this is going to be
or let's make sure it shows the
liquidity Suite but yeah so this is the
only order block and then from there
right boom then we go higher so this is
something we need to understand that
there's only one order block within
every single Trend that gets formed okay
yes there can be order blocks on every
single time frame which is again a
reason why I love the way that I trade
because all of these concepts are
applicable on every single [ __ ] time
frame and that's just the way that you
know this [ __ ] should be
um so
that being said today was today was very
very short
um there really isn't much else to to
cover on order blocks um besides the
fact that it is the
it is the move prior to the liquidity
sweep that causes the liquidity sweep
and then because of that move and
because those orders were be were able
to get filled we can get that break of
structure
okay and then when we get that break of
structure what will price likely do it
will likely want to go back up into that
area
fill even more orders because they were
able to fill orders there previously and
send price even lower or send price even
higher
cool
cool really not much else to talk about
um on order blocks today uh just quick
little you know explanation of what they
are you know hopefully you guys
um learn something from this on the
explanation days we don't really have
homework okay
um you're welcome school's off
um but so yeah that's that's
um that's order blocks okay I pretty
much explained and then in two days
we'll talk about how to spot them and
I'll show you how how [ __ ] powerful
these things are especially on uh lower
time frames because they they appear
literally every single day you know
every single hour I'm like one minute
time frames
um and it's it's awesome to see how how
how respected these things actually work
and I I honestly talk about these very
frequently
um in talking about how that's where
orders were accumulated I I call them
like accumulation areas it's very
similar similar it's it's pretty much
you know an order block accumulation
area all all pretty much the same thing
everyone loves giving different
terminologies for different things just
to sound fancy just to sound like
they're unique it's it's the same
[ __ ] [ __ ] we're all trading the same
[ __ ] we're all trading the same markets
um but anyways that being said that's
order blocks explained no homework for
today you guys are off the hook
um I'll see you guys tomorrow for some
psychology stuff hopefully you guys did
not trade today because as we can see
right hopefully you guys learned from
that news from that news thing we had
um
load this thing up if it wants to we had
PPI PPI and fomc all through here which
is actually
um going to happen in about two hours
and right we can we can look at the the
market it looks pretty [ __ ] terrible
if we look like
this is why we need to know when news
when news is going on
this is on the 15 minute time frame and
since U.S market opened which was right
here
uh right here we have moved a total of
34 Pips
on an extremely volatile pair in GBP JPY
so if that if that tells you if that
tells that should tell you enough about
why you should not be trading today
um so yeah hopefully you guys learned
something hopefully this gave you guys
some benefit
um with that being said I'll see you
boys tomorrow peace out
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