Order Block Trading

Allen Matshalaga, C.E.O of the AVFX Trading HUB company.

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Updated: Jan, 2024

4min Read

Order block trading is favoured by institutional traders and large funds as it allows them to execute large trades without moving the market significantly, thereby avoiding significant price slippage. By using this strategy, traders can also take advantage of economies of scale, reducing their trading costs and potentially increasing their profits

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Is order block a good strategy?

Answer

Yes, order blocks are a really good forex trading strategy with minimal risk and high probability returns. The effectiveness of the Order Block strategy as a trading approach can vary depending on market conditions and individual trader preferences.

BTMM vs Order Blocks

Btmm is a much complex strategy as compared to the Inner Circle Trader’s Order Blocks. With Btmm one has to know and understand terms like water, mayo, for example, which are simply moving averages with custom values and unique colour settings.

Btmm

Steve Mauro, who is the founder of the Beat The Market Maker method, spent years trading and perfecting this strategy.

Well, if you take it from us, the guy really put in the work and it is one of the most widely used strategy of all time.

The Market Maker Method is famous for its M and W patterns, also known as wedge patterns which recur time and time again.

When I first watched his 4 – Day boot camp my mind lit up. With the very first video I knew that this is what was missing in my trading, so I took notes, went over the videos over and over again until I gained understading.

Allen Matshalaga
Author

Assuming you have read our previous article on BTMM, you now understand how the strategy works and what needs to appear before you even consider taking a trade.

ICT Order Block

Order blocks are strong reversal levels and 90% of the time your trade always plays out. If you haven’t had any success with trading order blocks for some weird reason, I suggest that you try them out on this flawless broker.

How to spot an Order Block

Well, order blocks indicate imbalances and liquidity in the price. Just like indecision candles, one way of looking at order blocks is to see them as inverse engulfing candlestics meaning they’re upside down.

Once you identify an order block the next step is to project zones from the base of the candle. This is marked as a zone of interest and when price comes back into this zone it will be strongly rejected.

This is when you see wicks in price and you don’t understand why there was rejection there. It’s not that price just turned in the middle of nowhere, if you look left you would actually see an order block and that price was rejected as soon as it entered that zone.

Conclusion

In conclusion we have found out that if you combine Btmm and the order block strategy you will have a 95% chance of being successful in trading. This means you will only be looking for Ms and Ws on Order Block zones.

The O/B will be used for identifying strong levels of reversals whereas the market maker method will be used for entries and exits.

This combination will give you a high success rate and you can also throw in price action to get sniper entries.

Frequently Asked Questions

What is Order Block Trading?

Order Block Trading is a trading strategy that focuses on identifying and trading from areas on a price chart known as order blocks. Order blocks represent areas where significant buying or selling activity occurred, often indicated by a consolidation or a strong price reversal.
How does Order Block Trading work?

In Order Block Trading, traders look for areas on a price chart where price has previously reversed or consolidated. These areas are considered order blocks. Traders analyze the price action and market structure around these blocks to determine potential future price movements. They aim to enter trades at favorable prices when price returns to these order blocks.
What are the key elements of Order Block Trading?

Order Block Trading involves several key elements, including identifying order blocks, analyzing price action and market structure, confirming trade entries using additional technical analysis tools, managing risk with appropriate stop-loss orders, and setting profit targets based on potential price reversals or breakouts.
What are the advantages of Order Block Trading?

Order Block Trading offers several advantages. It helps traders identify areas of significant buying or selling interest, allowing for potentially high-probability trade setups. It can provide clear entry and exit levels based on price action around order blocks. Additionally, Order Block Trading emphasizes the importance of risk management by using stop-loss orders.
Are there any risks associated with Order Block Trading?

Like any trading strategy, Order Block Trading carries risks. Traders must exercise caution and apply proper risk management techniques to protect their capital. It is important to consider additional technical analysis tools, market conditions, and overall market sentiment when using Order Block Trading as part of a trading strategy.