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    ICT Order Block

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    simonomuemu

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    © All Rights Reserved
    Download as TXT, PDF, TXT or read online from Scribd

    ICT Order Block

    Uploaded by

    simonomuemu
    69 views2 pages

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    ICT Order block

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    69 views2 pages

    ICT Order Block

    Uploaded by

    simonomuemu

    Copyright:

    © All Rights Reserved
    Download as TXT, PDF, TXT or read online from Scribd
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    An ICT (Inner Circle Trader) order block is a significant concept in the ICT

    trading methodology. It represents a price level where institutional traders have


    placed large orders, causing significant market movements. Here’s a detailed
    breakdown:

    ### Definition:
    An order block is an area on the price chart where large institutional traders have
    executed a significant number of orders, resulting in a substantial move in the
    market. These areas often act as support or resistance levels in future price
    action.

    ### Characteristics:
    1. **Large Candles**:
    - Order blocks are usually identified by large bullish or bearish candles,
    indicating a strong buying or selling interest from institutional traders.

    2. **Prior to Major Moves**:


    - They are typically formed before major market moves, making them reliable
    zones for potential reversals or continuations.

    3. **Price Revisit**:
    - The price often revisits these areas, providing trading opportunities. When
    revisited, these areas tend to act as support in an uptrend and resistance in a
    downtrend.

    ### Identification:
    1. **Bullish Order Block**:
    - Found at the base of a strong upward move.
    - Identify the last down candle before a significant bullish move.
    - This area represents where institutional buying likely occurred.

    2. **Bearish Order Block**:


    - Found at the top of a strong downward move.
    - Identify the last up candle before a significant bearish move.
    - This area represents where institutional selling likely occurred.

    ### Usage in Trading:


    1. **Entry Points**:
    - Traders look to enter trades when the price revisits the order block.
    - In a bullish scenario, a trader might look to buy at the bullish order block.
    - In a bearish scenario, a trader might look to sell at the bearish order block.

    2. **Stop Loss Placement**:


    - Stops are often placed just beyond the order block, assuming that if the price
    moves significantly beyond this level, the setup is invalidated.

    3. **Confluence**:
    - Combining order blocks with other trading tools and strategies (like Fibonacci
    retracement levels, support/resistance zones, and trend lines) increases the
    probability of successful trades.

    4. **Time Frame Considerations**:


    - Order blocks can be identified on various time frames. Higher time frames
    (daily, weekly) tend to be more significant, but intraday order blocks on lower
    time frames can also provide trading opportunities.

    ### Example:
    - **Bullish Order Block**:
    1. Identify a strong bullish move on the chart.
    2. Locate the last bearish candle before this move.
    3. Mark this candle’s range as the bullish order block.
    4. When the price revisits this area, look for buying opportunities.

    - **Bearish Order Block**:


    1. Identify a strong bearish move on the chart.
    2. Locate the last bullish candle before this move.
    3. Mark this candle’s range as the bearish order block.
    4. When the price revisits this area, look for selling opportunities.

    Order blocks are a critical component in the ICT methodology, providing insight
    into potential areas of market reversals and continuations based on institutional
    trading behavior. Understanding and accurately identifying order blocks can
    significantly enhance trading performance.

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