Identifying Valid Order Blocks
Order blocks are areas of significant price action where large orders were likely placed and filled. They can act as potential support or resistance levels.
To identify a valid order block, look for:
Significant Volume: A large volume traded within a specific price range indicates institutional activity.
Price Action: A clear breakout or breakdown from the order block, followed by a retest, suggests its validity.
Market Context: The order block should align with the overall market trend for higher reliability.
Unmitigated Conditions: The order block should remain unchallenged, without significant price action penetrating it.
By carefully analyzing these factors, traders can increase their chances of identifying valid order blocks and potentially capitalize on profitable trading opportunities.
