TheBossTraders Course Study Material

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INTRODUCTION

Welcome to THEBOSSTRADER Order block playbook. This will be your point of reference
when using this strategy. Using order blocks is all about understanding the story behind
each trade and understanding why order blocks exist and how they are used.

Understanding this will change your perspective on how you view the markets.
Order blocks (OB) are areas where Institutions are either buying or selling from, these blocks
are formed prior to a large impulse to an already pre-planned direction. The reason we trade
order blocks is that for the institutions to make a move they need to grab liquidity first, this is
from retail traders' stop losses, where many retail traders call it 'stop hunts'. So institutions drive
the price to grab this before creating their desired move. Institutions do not use Stop losses,
which means although they have moved the market how they would like, they still have a trade
going the opposite way in heavy drawdown. So they drive the price back down to mitigate their
orders then continue the move. This is where we come in with our strategy. We look to enter at
this mitigation and follow price with them.

This strategy is not overly difficult however requires practice to understand how OBs work.

HOW TO TRADE ORDER


BLOCKS
The first stage is identifying your higher time frame directional bias. Whether you are looking for
intraday or Swing entries you still need to understand which way the market is moving for the
pair that you are focusing on. Essentially you want to identify Order blocks from weekly down to
hourly and work off there. However, the more experience you gain, you may find that you can
trade intraday moves by having a short-term directional bias from lower time frames and finding
entries on an even lower time frame. Either way, the concept is exactly the same.

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THE SAME IS TRUE IN TERMS OF AN UPTREND.

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The 3 things we look at before entering are:
1. 1. Look at the overall market structure ( Higher Highs and Higher Lows or Lower Highs
and Lower Lows. Bearish or Bullish ).
2. 2. Look for supply or Demand zones according to the higher timeframe trend ( So if the
higher timeframe trend is a down trend then you would look for supply zones and if you
are in a bullish market then you would demand zones.
3. 3. Look at the lower time frames and look for the lower time frame confirmations ( this
can be in the form of reaction to the 4 Hour order block or it can be order blocks forming
on the lower time frames inside the higher time POI(Point Of Interest).

DRAWING AN ORDER BLOCK OR AREA OF SUPPLY OR DEMAND, WE FOCUS ON THE LAST


OPPOSING CANDLE BEFORE THE BIG MOVE AWAY FROM A SWING HIGH OR SWING
LOW.

EXAMPLE 1

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EXAMPLE 2

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NOTICE THE SAME IS TRUE FOR AN UPTREND

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ADVANCED EXAMPLES

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Either way you go about, you get similar results and its
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Either way you go about, you get similar results and it's all dependent on your risk appetite
and how you are comfortable trading. Trading is personal to you, you don't need to follow
what everyone else is doing. You need to know what you are comfortable with doing and how
you are happy about going about it.

IMPORTANT NOTES TO IDENTIFY THE BEST ORDER


BLOCKS

1. ALWAYS MAKE SURE THAT PRICE BREAKS STRUCTURE BEFORE MARKING AN OB


2. LIQUIDITY ALWAYS LIES AT EQUAL HIGHS/LOWS, PRICE IS MOST ATTRACTED TO SUCH

AREAS.

NOTICE FROM THE DIAGRAM ABOVE, RETAIL TRADERS SO A POTENTIAL SHORTING


OPPORTUNITY, HENCE THE INSTITUTIONAL BANKS PUSHED PRICE HIGHER IN ORDER TO
GRAB LIQUIDITY FROM EVERYONE WHO WAS SELLING AT A RESISTANCE AREA.

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SCALING DOWN ON A LOWER TF FROM WHAT WE GOT BEFORE THE BREAK. HERE IS
WHAT HAPPENED.

3. ALWAYS CHECK IF YOUR ORDER BLOCK IS LOCATED AT A HIGHER PRICE OR A LOWER


PRICE, THE MAIN MOTIVE IS TO BUY LOWER AND SELL HIGHER.
4. ORDER BLOCKS RESTING ABOVE OR BELOW LIQUIDITY ZONED ARE MORE LIKELY TO
HOLD, SO THEY ARE GOOD AREAS TO TRADE FROM.

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SETUPS
1. SH + BOS + RTO
2. SHS + BOS + RTO

KEYWORDS:
SH - STOP HUNT/MANIPULATION

BOS - BREAK OF STRUCTURE

RTO - RETURN TO ORIGIN/ RETURN TO ORDER BLOCK

SHS - SHIFT IN MARKET STRUCTURE

SH + BOS + RTO SETUP

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Notice from the SH + BOS + RTO example above...price returned to RTO, but the RTO STOP
HUNTED/MANIPULATED some EQL(Equal Lows) and made a BOS, that area forms a potential
OB and we can look for the same setup around that area.

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Another thing to observe is the imbalances price make after a SH, this will give a more valid
reason for price to RTO in order to fill in the imbalances.

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This can be seen on any timeframe, but never forget what the HTF bias is to get the most out
of the SH + BOS + RTO setup.

SHS + BOS + RTO SETUP

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FOR AN EXERCISE TRY FINDING THE SH + BOS + RTO AND SHS + BOS + RTO SETUPS ON YOUR
CHARTS AND MAKE SOME FLASH CARDS.

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If you look closely into the schematic you will notice that we have a SH + BOS + RTO
SETUP.

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We normally don't trade wyckoff, it is there to help us in identifying if the market is
distributing or accumulating, the two setups which we studied previously are the ones that
we look for every time when we look for potential setups.

Looking closely at the schematic, we have an SH + BOS + RTO


SETUP.

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BACKTESTING ALL THAT IS TAUGHT HERE IS VERY IMPORTANT, AND WHEN IT COMES TO
RISK MANAGEMENT YOU WILL HAVE TO CALCULATE YOUR POSITION SIZING BEFORE TAKING
A TRADE BECAUSE THE STOP LOSS VARIES ON EACH AND EVERY SETUP.

DISCOUNTED PRICE
In this section, we are going to look at PREMIUM PRICE AND DISCOUNTED PRICE using the
Fibonacci to help identify which ODER BLOCKS will most likely hold when looking for
significant levels or areas of interest. Our level of interest in the Fibonacci is 50% level.

Looking at the diagram above, we can clearly see that we have two order blocks paired with
some imbalances clearly showing that the banks/ market maker was involved in this big move
to the upside...Now we need to identify which order block will hold.

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Looking at the diagram above if we take the fibonacci tool from the most recent swing low to
swing high, both AOI(Areas Of Interest) lie below the 50% level, this means the price will be
discounted, now we will have to observe the reaction of price when it reaches these levels in
order to make entries.

Looking at the behavior of the candles shows that price is currently respecting that area. We can
now make an entry.

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Price reacted to the discounted OB.

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THE SAME IS TRUE IN TERMS OF SELL SIDE SETUPS...WHICH IS A TASK FOR YOU TO MAKE
FLASHCARDS.

DONT FORGET TO BACK TEST THEN FORWARD TEST BEFORE INVESTING MONEY IN THIS...ON
AVERAGE IT HAS A 68% WIN RATE. WHICH SHOULD DEFINITELY MAKE YOU PROFITABLE OVER

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TIME. ALWAYS PICTURE WHAT RETAIL MINDS ARE THINKING OVER A SETUP BEFORE
PLANNING YOUR SETUPS, PRICE IS ALWAYS ATTRACTED TO AREAS OF LIQUIDITY.

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