The Ultimate Orderblock Strategy for 2025 (Full Guide)

Summary

In this video, the speaker simplifies the concept of order blocks in trading, specifically focusing on their role in high-probability trades. By combining order blocks with break-and-retest strategies, traders can enhance their win rates. The video breaks down the three key steps to identify order blocks and their importance in understanding market liquidity. Using clear examples from real trades on AMD, the speaker demonstrates how to draw and trade order blocks for precise, high-confluence entries, ultimately helping traders improve their performance with simple, actionable insights.

Takeaways

• 😀 Order blocks are areas where liquidity is resting, typically where smart money traders enter or exit trades.
• 😀 Combining order blocks with the break and retest strategy increases trade probability, improving win rates.
• 😀 Identifying order blocks involves recognizing impulsive moves, break of structure, and lower time frames for precision.
• 😀 Continuation order blocks are focused on momentum trading rather than reversals, particularly in the break and retest strategy.
• 😀 Order blocks must align with other key levels like previous highs or lows to enhance trade confluence and increase success rates.
• 😀 An order block is formed by a down-closing candle following an impulsive move, which is key to identifying an entry point.
• 😀 Displacement is a strong sign of buyer strength, indicating a high-probability order block for momentum trades.
• 😀 Using lower time frames (e.g., 1-minute) for precise entry into an order block is crucial for momentum-based trading.
• 😀 The 2R risk-to-reward ratio is a common target, where the goal is to risk a certain amount to earn twice that amount.
• 😀 Successful use of order blocks can be demonstrated with real examples, as seen in AMD trades where key levels and order blocks align for profitable moves.

Q & A

What is the main concept discussed in the video?

The video discusses the concept of order blocks and how they can be combined with the break-and-retest strategy to increase the probability of successful trades.

Why does the speaker find order blocks important for trading?

Order blocks help identify areas of liquidity where smart money traders are entering or exiting trades. This allows traders to anticipate price movements more accurately, improving win rates.

How does combining order blocks with break-and-retest enhance trading success?

By understanding where liquidity sits with order blocks, and combining it with key levels and a break-and-retest strategy, traders can increase the likelihood of their trades succeeding, leading to higher win rates.

What are the three important steps to identify order blocks?

1) The stock must have an impulsive move. 2) The stock must break structure, meaning it breaks a previous high or low. 3) The trader must go to a lower time frame to trade the order block.

What is the difference between a reversal order block and a continuation order block?

A reversal order block is used to anticipate a reversal in price direction, while a continuation order block is used when trading in the direction of the current trend, focusing on momentum.

What type of order block does the speaker recommend using with the break-and-retest strategy?

The speaker recommends using continuation order blocks, as they align with momentum and the break-and-retest strategy, where the trend is expected to continue rather than reverse.

How can you identify an order block on a chart?

To identify an order block, look for the previous down-close candle after an impulsive move in an uptrend. This candle marks the potential order block where you can enter a trade.

What is the significance of key levels in trading order blocks?

Key levels provide confluence with the order block. For example, when an order block aligns with a previous support or resistance level, it increases the probability of a successful trade.

What is displacement in the context of order blocks?

Displacement refers to the strength of a price move. When an impulsive move happens with strong displacement, it indicates that the momentum is in favor of the direction, making the order block more reliable.

What should be considered when setting a stop loss for a trade using an order block?

The stop loss should be placed just below the break of market structure or the low of the order block to protect against unfavorable price movement.