New indicators will continue to be developed as long as forex trading is concerned due to the demand from traders, particularly newbies.
All indicators were developed with a thorough understanding of how the currency market operates, and that much is certain.
Before using a bullish order block indicator, it’s crucial to have a firm understanding of forex technical analysis, which calls for spotting order blocks on naked charts.
Once you do, you’ll be in a better position to make the most of the order block indicator you use. This article’s main objective is to demonstrate how to recognize order blocks without the use of any indicators.
Table of Contents
HOW CAN YOU TELL A BULLISH BLOCK ORDER
You can tell a bullish order block by identifying multiple areas of support and resistance over a long period of time on a higher timeframe.
On a bullish trending market, the price breaks and closes above the strong support and resistance zone. On a breakout and sometimes retest, traders place a buy order to profit from the bullish trend.
See Image Example
An order block can be seen on a bullish trending market or a reversal market.
BULLISH ORDER BLOCK INDICATOR
Bullish order block indicators are non-default tools used on MT4, MT5, and trading view platforms that help traders easily identify order blocks on the chart.
HOW DO YOU USE ORDER BLOCK INDICATOR
One common mistake inexperienced forex traders make when using the order block indicator is quickly placing trades where the order block indicator appears.
When it comes to using the order block indicators, it is best used along with other timeframes for market entry.
When the order block indicator appears on a higher timeframe, this is where you apply market structure and multiple timeframe analysis.
In a lower timeframe, you will find a breakout of support and resistance that will support the order block indicator on the higher timeframe.
HOW DO YOU SPOT AN ORDER BLOCK
Many traders have heard about order blocks, but not many cannot easily identify them. I have had many conversations with traders and one question that always comes up is ‘how do you spot an order block’.
Sit back, relax, and read through to know the easier way to spot an order block.
Spotting order blocks should be easy. Here is a list of markers to look out for to easily spot order blocks
HIGHER TIMEFRAME: Because order blocks are created by banks and big financial institutions, it is safer to look at higher timeframes to spot order blocks.
MULTIPLE SUPPORT AND RESISTANCE OVER A LONG PERIOD: multiple support and resistance are a good place to find order blocks on higher timeframes.
See the image below.
WHAT IS THE BEST ORDER FLOW INDICATOR
The truth about the forex market is that no indicator is perfect as there are many order flow indicators on the internet.
One thing is certain before you buy an order flow indicator; you should have a good understanding of order block and order flow.
DO ORDER BLOCKS WORK
Yes, order blocks work; order blocks are high-probability zones in the forex market.
It is critical for forex traders to pay attention to these zones since these order blocks are produced by the operations of banks and large financial institutions; they have a significant impact on the forex market and can define the market’s direction for a long time.
BEST TIME FRAME TO TRADE ORDER BLOCKS
Before we can conclude on the best time frame to trade order blocks, two questions we have to deal with are how order blocks are formed and who creates them.
Order blocks are formed as a result of the trading activities of banks and big financial institutions.
From the above statement, you can see that banks and big financial institutions focus on higher time frames when trading the forex market as these banks trade long-term.
This also means that as a retail trader who wants to trade order blocks; the best time frames to trade order blocks are higher timeframes, from my experience from 30M upward.
As long as trading forex is concerned, there will always be improvements in which indicators are made. In all of this as a forex trader, it will do you much good to learn to identify order blocks without the use of any third-party indicators.