Vertex: Investing
Vertex: Investing
Vertex: Investing
INVESTING
Free oRDER BLOCK
plAYBOOK
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 because 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 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 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 USING ORDERBLOCKS
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 the 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 frames. Either way, the concept
is exactly the same.
From above we can see a clear break of structure, this is the first thing we look
for before looking for OBs. Reason for this, we want to find the candle that
created this move, this candle is our OB. The OB is generally the last opposing
candle before the move. So if its a bearish break, the OB is a Bullish candle.
However, we need to understand what kind of BOS we look for and how to refine
our OBs.
HOW TO REFINE ORDER BLOCKS
1 hour TF 1 min TF
So here, that big blue candle is our OB, however within that candle on
a lower time frame, there is a clear OB and this is now our refined OB.
You can go down by as many time frames as you like.
TIP: If you are happy with the RR from a particular time frame OB, then
Simply use that one. Don't get greedy and don't use lower time frames
if it makes you anxious.
HOW TO TRADE USING ORDERBLOCKS
This method is very simple.
Once you locate your Higher time frame OB, you simply
go down the time frames till you find an OB within the
higher time frame OB which is clear.
Once you find your OB, mark it out. Use an OB which
gives you and RR you are comfortable with.
You can set a limit order at the OPEN or the 50% mark of
the OB with your stop loss below the low of the OB or
the overall low and target the recent high or low
depending on if you are buying or selling.
Either way you go about, you get similar results and its
all dependent on your risk appetite and how you are
comfortable trading. Trading is personal to you, you dont
need to follow what everyone else is doing. You need to
what you are comfortable with doing and how you are
happy about going about it.
15 second refinement
EXAMPLE 1
GBPNZD
1:70 - 20 mins
PSYCHOLOGY
This way of trading is all about precision
and finding the market at the perfect time of
reversal. However, don't get too greedy
with the RR, there is nothing wrong with
sacrificing a few PIPS and rr for a safer
trade.
Best timeframes?
BEst pairs?
Strike rate?