Order Blocks Explained: 3 Best Strategies Revealed

Data Trader
15 Sept 202419:21

Summary

TLDRThe video is an ultimate guide to mastering order blocks in trading, covering both basic and advanced techniques. It explains the concept of order blocks, their differences from support and resistance levels, and the rules for identifying valid order blocks. The video also introduces three high-probability trading strategies using order blocks: multi-timeframe confirmation, inducement traps, and breaker blocks. It emphasizes the importance of understanding market structure changes and using these strategies effectively for consistent profits. The guide serves as a comprehensive resource for traders at all levels, aiming to leverage order blocks for successful trading.

Takeaways

  • πŸ“Š Order blocks are areas on the chart where large institutions, known as smart money, enter the market, causing significant price movements.
  • πŸ”΅ Bullish order blocks (buy orders) and 🟣 bearish order blocks (sell orders) are identified based on price action and inefficiencies, with different colors used for clarity.
  • 🚫 Order blocks differ from support and resistance: they're thicker zones and typically valid for one retest, while support and resistance can be used multiple times.
  • πŸ“‰ A valid order block must create an inefficiency or gap between candlesticks, indicating imbalance in the market.
  • β›” Once an order block is touched or tested, it is no longer valid for future trades, unless using specific strategies.
  • πŸ“ To confirm a valid order block, it must lead to a break of structure (BOS) or a change of character (CHOCH) in the market trend.
  • πŸ” Strategy 1 involves multi-timeframe confirmation, starting from a higher timeframe to find valid order blocks and using a lower timeframe to confirm reversals with patterns like bearish engulfing.
  • 🎯 Strategy 2 uses inducement traps, where minor key levels above major order blocks often induce traders to enter prematurely, leading to a retest of the major order block.
  • πŸ“‰ Strategy 3 focuses on breaker blocks, where previously valid but broken order blocks act as potential resistance levels for new short positions.
  • πŸ›  SimpleFX is promoted as a versatile trading platform, offering a $40 bonus with a minimum deposit, along with integrated tools like TradingView for streamlined trading.

Q & A

  • What is the main topic of the video?

    -The video provides an Ultimate Guide to mastering order blocks in trading, including both basics and advanced techniques.

  • What are the two types of order blocks?

    -The two types of order blocks are bullish order blocks, which are caused by large buy orders, and bearish order blocks, which are caused by large sell orders.

  • How do order blocks differ from support and resistance levels?

    -Order blocks are formed based on significant price movement, while support and resistance levels require prior rejections to form. Additionally, order blocks are usually drawn as thick zones, whereas support and resistance levels are drawn as thin zones or lines.

  • What are the three rules for identifying a valid order block?

    -The three rules are: 1) It must create a gap or inefficiency. 2) It must remain unmitigated or untested. 3) It must lead to a break of structure or a change of character.

  • What is the significance of inefficiency in identifying order blocks?

    -Inefficiency, also called imbalance, refers to a gap between candles that indicates a potential order block. It helps traders distinguish between valid and invalid order blocks.

  • What does the term 'change of character' mean in trading?

    -A 'change of character' occurs when the market structure shifts from an uptrend to a downtrend, or vice versa, marked by the price breaking previous highs or lows.

  • What is the multi-timeframe confirmation strategy?

    -In the multi-timeframe confirmation strategy, traders identify an order block on a higher timeframe and wait for confirmation of a price reversal on a lower timeframe, such as through a bearish engulfing candlestick pattern.

  • What is an inducement trap in trading?

    -An inducement trap involves a minor key level forming near a major order block, where traders expect a bounce at the minor key level, but the price breaks this level and retraces to the major order block before reversing.

  • What is a breaker block?

    -A breaker block is a previously valid order block that has been broken. It can act as a potential resistance level where the price may reject after retesting the broken order block.

  • What is the role of large institutions, often referred to as 'smart money,' in the formation of order blocks?

    -Large institutions or 'smart money' often trade with significant capital, causing noticeable price movements that form order blocks when they enter or exit positions.

Outlines

00:00

πŸ“Š Mastering Order Blocks: The Ultimate Guide

This paragraph introduces the video as an 'Ultimate Guide to mastering order blocks,' aimed at both beginner and advanced traders. It highlights the significance of order blocks in trading and promises an in-depth look at various concepts and three high-probability strategies for trading with order blocks. The video is presented as a complete masterclass that covers everything from basics to advanced techniques, designed to help traders achieve consistent profits.

05:01

πŸ“‰ What Are Order Blocks? An Introduction

Order blocks are areas on a price chart where large institutions like banks have placed significant trades, often leading to sharp price movements. These areas, referred to as smart money, are critical for traders to identify as they present potential trade opportunities. There are two types of order blocks: bullish, created by large buy orders, and bearish, created by large sell orders. The paragraph explains the difference between order blocks and traditional support/resistance levels and the importance of identifying these blocks correctly for successful trading.

10:02

πŸ“ˆ Key Differences Between Order Blocks and Support/Resistance

The paragraph explores the differences between order blocks and support/resistance levels. The first difference is how they form: order blocks form after significant price movements, while support/resistance requires multiple rejections. Secondly, order blocks are drawn as thick zones, while support/resistance levels are thin. Finally, order blocks are usually one-time use, while support/resistance levels can be tested multiple times. The paragraph also introduces the concept of confluence, where order blocks and resistance levels overlap, increasing the likelihood of a price reaction.

15:03

πŸ” How to Identify Valid Order Blocks

The paragraph provides three essential rules for identifying valid order blocks: 1) The presence of a gap, called inefficiency or imbalance, in price movements. 2) The order block must be unmitigated (untouched by price) to remain valid. 3) The order block must lead to a break of structure or change of character in the market. Examples are given to show how these rules apply, with charts illustrating upward movements and gaps, and how to correctly draw order blocks using specific candles.

πŸ“‰ Market Structure: Break of Structure vs. Change of Character

This paragraph explains two critical terms: break of structure and change of character. In an uptrend, a break of structure occurs when the price breaks previous highs, continuing the trend. A change of character happens when previous lows are broken, indicating a shift from an uptrend to a downtrend. These concepts are essential in understanding how market trends form and reverse. The paragraph then ties these terms back to order blocks, noting that a valid order block must either cause a break of structure or a change of character.

πŸ› οΈ Practical Application: Identifying Order Blocks

Expanding on the previous rules, this section provides more chart examples of how order blocks form in real-market scenarios. It walks through identifying both bullish and bearish order blocks by analyzing inefficiencies, and how break of structure or change of character validates them. The paragraph highlights the importance of waiting for price development before drawing order blocks and notes that multiple structures (small and large) can influence the validity of an order block, making it essential to track the market's broader context.

πŸš€ Strategy 1: Multi-Timeframe Confirmation

The first trading strategy discussed involves using multi-timeframe confirmation. The trader identifies an order block on a higher time frame, then switches to a lower time frame to confirm bearish or bullish momentum before entering a trade. A favorite confirmation method is the bearish engulfing candlestick pattern. Once a confirmation pattern is found, the trader places a stop loss above the order block and aims for a take-profit level at twice the stop-loss distance. The strategy emphasizes waiting for retracement to the order block and using multiple time frames for greater accuracy.

πŸ“‰ Strategy 2: Inducement Traps

This strategy focuses on 'inducement traps,' where a minor key level forms near a major order block. Large institutions push the price past the minor level, triggering stop losses and enabling them to re-enter at the order block for a better price. Traders can exploit this by placing a buy order in the order block zone. The setup works because the inducement level lures in traders, who then get stopped out as the price retraces to the order block, allowing for a profitable trade. Examples illustrate this strategy in action.

πŸ”„ Strategy 3: Breaker Blocks

Breaker blocks are previously valid order blocks that have been broken. Once an order block is broken, it may act as a new resistance level, giving traders an opportunity to open short positions. The price often retraces to the breaker block before rejecting it again. This strategy is typically a one-time use, as its effectiveness diminishes after the price tests the level. The paragraph provides a detailed example of how a bullish order block was invalidated, broke down, and then provided a shorting opportunity when price retraced to it.

πŸ’‘ Wrapping Up: How to Trade Order Blocks

The conclusion reinforces the importance of understanding and applying the strategies discussed in the video. It invites viewers to use these strategies in real trades, promoting a partnership with SimpleFX, a trading platform that integrates TradingView for analysis and trade execution. The platform’s features and a special $40 bonus for new users are highlighted as incentives for trying out the strategies. The video ends with a recommendation for beginners to start with a simpler trading strategy before diving into order block techniques.

Mindmap

Keywords

πŸ’‘Order Block

An order block is a key area on a chart where significant amounts of capital, typically by large institutions or 'smart money,' have entered the market. It signals a zone where buying or selling activity has caused noticeable price movements. The video explains how bullish order blocks (caused by buy orders) and bearish order blocks (caused by sell orders) serve as critical points for potential trade opportunities.

πŸ’‘Smart Money

Smart money refers to the capital controlled by large financial institutions, big banks, or professional traders with significant market influence. In the context of the video, smart money is key to creating order blocks since their large transactions often lead to sharp price movements, which traders can use to identify potential trading opportunities.

πŸ’‘Break of Structure

A break of structure occurs when the price in a market trend breaks past a previous high or low, signaling a continuation or reversal of the trend. For an order block to be valid, it must lead to a break of structure, which confirms a significant shift in market dynamics. In an uptrend, it’s the creation of higher highs; in a downtrend, lower lows.

πŸ’‘Change of Character

A change of character is when the market transitions from one trend to another, such as moving from an uptrend to a downtrend or vice versa. In the video, this concept is linked to the validation of order blocks, as a change of character confirms a significant shift in market direction, making the identified order block more reliable for trading.

πŸ’‘Inefficiency/Imbalance

Inefficiency, also called imbalance, refers to gaps in the market where price moves significantly without enough opposing trades to fill the gaps. In the video, it's explained that a valid order block must create an inefficiency or imbalance in the price movement, and traders often look to exploit these gaps for potential profits.

πŸ’‘Mitigation

Mitigation refers to the process of an order block being tested or 'used' after the price touches it, rendering the order block invalid for future trades. The video emphasizes that once an order block is mitigated, it cannot be relied on for further trading, unless a specific breaker block strategy is used.

πŸ’‘Confluence

Confluence in trading refers to the alignment of multiple technical factors at a particular point on a chart, increasing the probability of a successful trade. The video discusses confluence when an order block aligns with other factors like support and resistance levels, providing stronger trade signals.

πŸ’‘Multi-Timeframe Confirmation

Multi-timeframe confirmation is a strategy where traders use a higher timeframe to identify order blocks and then confirm the validity of these blocks using a lower timeframe. This technique helps ensure that the identified order block is more likely to hold. The video recommends using this strategy to enhance the accuracy of trading decisions.

πŸ’‘Inducement Trap

An inducement trap is a setup where a minor key level forms near a major order block, luring traders into entering a position at the minor level, only to get stopped out when the price retraces to the major order block. The video explains how smart money uses inducement traps to enter positions at better prices, leading to profitable trades.

πŸ’‘Breaker Block

A breaker block is a previously valid order block that has been broken and can now act as a potential resistance or support level when the price retraces to it. In the video, it's explained that although order blocks are generally one-time use, a broken order block can still provide opportunities for trades when used as a breaker block.

Highlights

Introduction to mastering order blocks and their importance for traders.

Definition of order blocks as key areas where significant capital enters the market, often by large institutions.

Difference between bullish (buy orders) and bearish (sell orders) order blocks, with color coding suggestions.

Clarification on how order blocks differ from support and resistance levels based on formation, drawing, and retests.

Explanation of the importance of gaps (inefficiencies) in identifying valid order blocks.

Key rule: An order block must remain untested to be considered valid for trading.

Order blocks must lead to a break of structure (BOS) or change of character (CHOCH) to be valid.

Detailed explanation of market structure with examples of uptrends, downtrends, break of structure, and change of character.

Introduction to multi-timeframe confirmation strategy: using higher and lower time frames to validate order blocks.

Explanation of the inducement trap strategy: how smart money manipulates key levels near order blocks.

Introduction to breaker blocks: previously valid order blocks that can act as resistance or support after being broken.

Example-based walkthrough of how to trade breaker blocks using risk management techniques.

Using bearish engulfing candlestick patterns for confirmation in the multi-timeframe strategy.

Tips on setting stop loss and take profit levels for high reward trades in each strategy.

Summary of the three key strategies: multi-timeframe confirmation, inducement traps, and breaker blocks.

Transcripts

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hey traders in this video I've put

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together the Ultimate Guide to mastering

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order blocks we'll dive deep into both

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the basics and Advanced Techniques

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whether you're a beginner or an advanced

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Trader be sure to watch the entire video

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so you can understand every Concept in

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detail I'll also reveal three high

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probability trading strategies using

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order blocks by the end of this guide

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you'll have a solid understanding of how

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to leverage order blocks for consistent

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profits overall this video serves as a

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complete masterclass on trading with

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order blocks so let's dive in here are

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the topics covered in this

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video first let's start by understanding

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what an order block is an order block is

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a key area on the chart where

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significant amounts of capital have

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entered the market typically by big

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Banks or large institutions often

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referred to as smart money since they

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trade with substantial Capital their

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actions usually cause noticeable price

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movements on the chart so if you notice

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the price moving sharply from a specific

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area like this one it could indicate

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that smart money has taken a position

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large buy orders are needed to drive the

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price up this quickly the initial area

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where these trades are executed is known

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as an order block order blocks can be of

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two types bullish order blocks which are

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caused by large buy orders and bearish

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Order blocks which are caused by large

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sell orders for this video I'll color

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bullish order blocks as blue and bearish

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Order blocks as purple but of course you

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can use any color you want once an order

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block is identified it can provide

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potential trade opportunities as the

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price tends to retest and bounce after

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hitting that area for example if you

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bought at the order block here it would

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have resulted in some nice profits now

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you might be asking yourself isn't this

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the same as support and resistance while

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both order blocks and support resistance

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are considered key levels they are not

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the same as there are major differences

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between them first difference is how

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they form order blocks are formed based

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on significant price movement on a chart

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for example if the price moves

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significantly from an area you can draw

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an order Block in contrast support and

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resistance levels require prior

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rejections to form for example if the

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price once rejected this level here and

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another rejection happened here then we

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can draw support level second difference

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is how they are drawn on the chart order

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blocks are typically drawn as thick

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zones or areas while support and

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resistance levels are usually drawn as

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lines even if they're drawn as zones

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they're usually thin zones not as thick

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as order blocks third difference is the

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number of retests order blocks are

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typically a one-time use meaning if they

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are retraced once they're done you can

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not use them multiple times in contrast

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support and resistance levels can be

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retraced multiple times while order

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blocks and support resistance differ

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they can be used together for example if

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an order block forms while the price is

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also at a resistance level this is

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called a Confluence finding this kind of

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setup is ideal as the price has a higher

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chance of reacting to an area of

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Confluence now before we can trade using

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order blocks we need to know how to

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correctly identify them remember in our

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very first example I mentioned that if

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the price moves significantly from a

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point we could draw an order block well

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it's not quite that simple a significant

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price move doesn't automatically mean

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that an order block is present there are

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specific rules that determine whether an

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order block is valid so here are the

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three important rules for a valid order

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block these are crucial as you won't be

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able to trade the strategy if you don't

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get these down rule number one for a

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price to be classified as an order block

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it must create some sort of Gap

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afterward this Gap is what people refer

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to as

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inefficiency or imbalance so anytime you

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hear these terms it simply means Gap

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let's see an example so you can

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understand better here we have two

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similar price movements both moved

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upward significantly however notice the

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key difference the one on the left has a

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gap between the first candle's upper

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Wick and the third candle's lower Wick

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while the one on the right doesn't have

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it as the Wicks are intersecting with

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the candle's full body this Gap is

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what's called an inefficiency or

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imbalance so even though both setups

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show significant upward movement only

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the left one counts as a valid order

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block because there's inefficiency to

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draw the order block take the first

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candle before the inefficiency and draw

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a rectangle over the full candle from

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the top Wick to the bottom

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Wick rule number two an order block

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needs to be unmitigated order blocks are

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generally a one-time use if the price

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touches an order Block it's no longer

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considered valid meaning it can't be

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tested or retraced

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for example let's say you spot a gap or

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inefficiency in the price so you draw an

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order block if you see the price or even

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just a wick touching that order block it

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means the order block is no longer valid

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because it has now been tested while

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there are strategies to reuse a tested

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order block I'll cover that later in the

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video but for now just remember that an

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order block is generally a onetime use

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rule number three the most important

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rule is that an order block must lead to

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a break of structure or a change of

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character afterward now for those of you

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who might not be familiar with these

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terms I'll give a quick recap but if you

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already know what they mean feel free to

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skip ahead to the Tim stamp displayed on

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the screen so basically we know that

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markets have Trends uptrends and

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downtrends let's take an uptrend as an

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example during an uptrend the market

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doesn't just move straight up instead it

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moves in a structured way forming what's

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called higher highs and higher lows

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they're called higher highs because each

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high is higher than the previous one and

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higher lows because each low is also

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higher than the previous one on the flip

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side in a downtrend the price forms

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lower highs and lower lows these are

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called Lower highs because each high is

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lower than the previous one and lower

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lows because each low is also lower than

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the previous one in a market structure

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like an uptrend each time the price

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breaks the previous highs and creates

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higher highs like this it's referred to

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as a break of structure now of course

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markets don't stay in an uptrend Forever

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at some point the trend will change this

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shift happens when the previous lows are

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broken leading to the formation of lower

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lows remember before the break we have

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higher lows but once the price breaks

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those levels they become lower lows this

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break of the previous lows during an

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uptrend is called a change of character

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why because it shifts the character of

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the market from an uptrend structure to

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a downtrend structure and the cycle

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repeats itself during a downtrend the

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price forms lower highs and lower lows

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when the previous lows are broken this

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is now referred to as a break of

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structure in the future if the price

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breaks the previous highs and forms

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higher highs during this downtrend

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that's called a change of character

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because the price shifts from a

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downtrend structure to an uptrend

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structure so that was a quick overview

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of what a break of structure and change

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of character are now how does all of

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this relate to order blocks for an order

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block to be valid it must lead to either

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a break of structure or a change of

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character

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afterward let's see an example in this

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chart we see a significant upwards move

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coupled with a gap or

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inefficiency so there's a possible order

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block here however this doesn't mean we

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can immediately draw an order block as

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we need to first see if the market forms

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either a break of structure or a change

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of character afterward right here we

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notice that the price hasn't yet formed

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a break of structure as it hasn't broken

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these previous highs so we wait for the

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price to develop further now once the

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price does break this High forming a

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break of structure that's when we can

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draw our order block on the first candle

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before the

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inefficiency and again we see the price

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move significantly upward coupled with

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inefficiency followed by a break of

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structure as the price forms higher

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highs so this makes it another valid

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order block that we can

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draw now let's look at another example

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in this chart the price is forming

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higher highs and higher lows and we have

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a possible order block here due to this

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inefficiency however since the price

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hasn't formed higher highs we can't

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count this as a valid order block yet

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after waiting some time the price moves

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down and forms another possible order

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block but this time it's a bearish one

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this is shown by the significant

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downward movement coupled with

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inefficiency on this red candle then the

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price breaks the previous lows of the

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structure forming lower lows since it

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made lower lows during this uptrend it

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counts as a change of character and the

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market structure has now shifted to a

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downtrend so we'll focus on the latest

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order block that aligns with the current

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Trend which is this bearish order block

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the previous bullish order block isn't

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valid because the price didn't form

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higher highs however this bearish one is

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valid because it resulted in a change of

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character here we see a significant

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upward movement coupled with

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inefficiency suggesting a possible order

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block however since the price hasn't

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formed a break of structure yet this

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order block isn't valid at this point

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after some time we notice the price

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moves downward and then back up forming

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another inefficiency indicating another

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possible order block this time the price

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does form higher Highs but it's within a

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smaller structure this makes it a valid

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order block within this smaller

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structure however if we look closely we

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also see that the price made higher

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highs within the previous larger

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structure this means the earlier

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possible order block is now a valid

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order block as well since the price

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formed higher highs within that larger

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structure so when drawing order blocks

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it really depends on which structure the

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order blocks are formed within so to

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recap the three rules to identify a

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valid order block are first it must

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create a gap also known as inefficiency

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or

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imbalance second it must remain untested

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or unmit ated third a break of structure

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or change of character must occur

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afterward identifying order blocks is a

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great skill but the real excitement

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comes when you start using them in a

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trading strategy now I'm about to reveal

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three order block strategies that can

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take your trading to the next level

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strategy number one multi-timeframe

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confirmation for this first strategy

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start by finding an order block on a

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higher time frame in this example we're

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using the Bitcoin USD 4H hour chart at a

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glance we can see two significant price

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movements the first one is moving upward

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here and the second is moving downward

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here both of them also have

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inefficiencies so we have two possible

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order blocks a bullish one and a bearish

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one however let's double check if these

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two potential order blocks are actually

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valid for this bullish one the price did

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move upward with inefficiency but it

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didn't form a clear break of structure

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plus the price retested it afterward so

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it's no longer unmitigated for the

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bearish order block the price clearly

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formed lower lows creating a break of

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structure plus it's unmitigated So based

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on our analysis only this bearish order

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block is valid once you've identified

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the correct order block the next step is

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to wait for the price to retrace back to

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that order block the moment the price

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touches the order block we now move on

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to the next step of the strategy which

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is confirmation we're trying to confirm

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whether the price will actually bounce

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off this order block to do that we

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switch to a lower time frame like the

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15-minute chart on the 15minute chart

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we're looking for any signs of bearish

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momentum to prove that the price will

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reverse from this order block you can

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use any type of confirmation tools

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whether it be an indicator like the ma

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CD finding a bearish Candlestick pattern

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or spotting a change in Market structure

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basically anything that confirms that

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the price is likely reversing from this

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level now my favorite confirmation tool

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is the bare bearish engulfing

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Candlestick pattern as it's simple yet

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effective for giving early signals a

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bearish engulfing pattern occurs when a

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smaller bullish candle is immediately

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followed by a larger bearish candle that

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completely engulfs the previous one this

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indicates a potential reversal from

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bullish to bearish once you spot it you

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can open a cell position right after the

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pattern has formed then place your stop

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loss slightly above the order block and

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set your takeprofit at 2x the size of

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your stop loss as you can see this

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strategy can lead to Some solid profits

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here's a cheat sheet that you can use

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when trading on multiple time frames if

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your high time frame is the weekly use

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the 4H hour as your low time frame if

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your high time frame is the daily use

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the 1 hour as your low time frame if

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your high time frame is the 4H hour use

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the 15minute as your low time frame if

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your high time frame is the 1 hour use

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the 5 minute as your low time frame and

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that's all you need for strategy number

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one but before we continue I want to

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talk about something that can help you

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trade these strategies more effectively

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simple effects simple effects is a free

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trading platform that offers all the

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stocks crypto Commodities and indices

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stock simple effects has it all what's

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even better is that they come with a

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built-in trading view chart which means

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you can analyze your trades and execute

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them all in one place no need to switch

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between platforms simple effects allows

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you to deposit using more than 70

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different payment methods making it

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incredibly easy to get your money onto

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the platform and start trading and

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here's the best part to thank my viewers

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give it a try I think you'll love it

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strategy number two inducement traps an

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inducement trap is a specific setup that

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involves a minor key level forming near

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a major order block take this example we

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have a major order block forming below

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and a minor key level forming above it

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due to multiple rejections this minor

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key level is also referred to as an

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inducement the strategy is called an

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inducement trap because in many cases

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the price will break this minor key

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level only to retrace to the major order

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block before reversing back up traders

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who bought at this seemingly obvious key

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level expecting a bounce would often get

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stopped out instead so if you spot a

play14:30

setup where there's a minor key level

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sitting above a major order block you

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can cue a buy order in the middle of

play14:36

that major order block this way your buy

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order only gets triggered if the price

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touches the order block offering you a

play14:43

high reward trade but if the price

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doesn't reach the order block that's

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perfectly fine because no position was

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opened while this may seem like a random

play14:52

and specific pattern it's actually more

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common than you might think and there

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are logical reasons to why this setup

play14:58

works first let's understand that large

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institutions want to enter the market at

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an ideal price but due to their massive

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Capital they can't do so without moving

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the price unlike retail traders who can

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enter positions easily smart money

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couldn't enter positions that easily as

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their large orders would push the price

play15:16

up causing their average entry price to

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be higher so in order to enter at a

play15:20

lower price they use inducement levels

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after entering the market and forming an

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order block they push the price back

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down to that order block by traing

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traders who bought at inducement levels

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expecting a bounce this is effective

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because Traders often Place stop losses

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just below key levels meaning just a

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little bit of selling pressure could

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trigger these stop losses which in turn

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leads to more selling this allows smart

play15:45

money which entered at the previous

play15:46

order block to re-enter at that price

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driving the price back up so that's the

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basic logic behind why this pattern

play15:53

works now let's look at a real example

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in this chart the price moves sign ific

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L upwards with an inefficiency followed

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by a break of structure making this a

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valid order block after this upward

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movement we identified an inducement

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Zone as the price formed multiple

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rejections at this support level now

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because we have a setup where there's a

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major order block below and a minor

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support level near it this could be a

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potential inducement trap this means the

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price could break the minor support

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level and retest the order block so we

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place a limit byy order in the middle of

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the order block and wait as you you can

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see the price moved downward broke the

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inducement level and triggered our buy

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order at the order block after the order

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is triggered we place a stop loss just

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below the order block and set our

play16:40

takeprofit at 2 to three times the size

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of the stop loss you could also Target

play16:45

the inducement Zone as your takeprofit

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as you can see this trade turned out to

play16:49

be profitable strategy number three

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breaker

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blocks in the very first part of the

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video I mentioned that order blocks are

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typically a one time use but there's

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actually a way to take advantage of

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order blocks that have been broken this

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strategy is called breaker blocks what

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is a breaker block a breaker block is a

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previously valid order block that has

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been broken once an order block is

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broken the price May retrace back to

play17:16

that level and it can act as a potential

play17:18

resistance level where the price May

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reject this level this gives us an

play17:21

opportunity to short at the breaker

play17:23

block keep in mind that breaker blocks

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are typically onetime use after the

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price breaks and retests the level their

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effectiveness is usually done let's

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break down this chart example in this

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chart we can see the price move

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significantly upward paired with

play17:38

inefficiency we also see the price made

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higher highs here so we can draw an

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order block at this candle but then the

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price moved downward and actually broke

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the order block this move also created a

play17:50

change of character as the price broke

play17:51

below the previous lows indicating that

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the trend has shifted from bullish to

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bearish now as the price retraces back

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toward the previous order block it can

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now act as a potential resistance Zone

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this is a prime area to open a short

play18:06

position then place your stop loss

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slightly above the breaker block and set

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your takeprofit at two times the size of

play18:13

the stop loss and as you can see the

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price rejected this order block hit our

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Target and resulted in a nice profit now

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that you know these strategies it's time

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to take action and start using them in

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real trades that's why I've partnered

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with simple effects to make your trading

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easier simp simple effects is a broker

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that lets you trade any instrument

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including stocks crypto Forex and more

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all on one platform they're very simple

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to use and they also come with a

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built-in trading view chart so you can

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analyze trades and execute them within

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the same platform they have no minimum

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deposit which means you can start

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trading with as little as $1 they also

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have some of the lowest fees in the

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market and if you sign up using my link

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below you'll get a free $40 bonus in

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trading Capital if you deposit at least

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$100 of course you can get more rewards

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as you deposit more so big thanks to

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simple effects for helping me make this

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video possible that's it the exact

play19:04

step-by-step process to find and trade

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order blocks however if you're a

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complete beginner with no trading

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experience I recommend you try a

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different strategy first in this video I

play19:14

explain the exact strategy any beginner

play19:16

can use to start making consistent

play19:18

profits from Trading thanks for watching

play19:20

and I'll see you in the next one

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Related Tags
Order BlocksTrading StrategiesMarket StructureBreak of StructureSmart MoneyForex TradingStock MarketCrypto TradingPrice ActionTechnical Analysis