🧵 Understanding Orderblocks and Breakers
1. What is an “Orderblock”?
An "Orderblock" is a price range on a chart where a significant number of buy or sell orders were executed. These blocks often indicate strong support or resistance levels, making them key areas to watch for traders
2. Bullish Orderblock
Bullish Orderblocks appear during bearish trends. They are price zones where buying activity surged, suggesting a robust support level.
2.1 Characteristics of Bullish Orderblocks:
- Identified as the last down candle or series of down candles before a notable upward price movement.
- These orderblocks act as support levels.
- Traders should consider taking LONG positions within these zones to benefit from potential price increases.
3. Bearish Orderblock
Bearish Orderblocks represent zones where significant sell orders are present. They typically emerge during uptrends and indicate a possible trend reversal.
3.1 Characteristics of Bearish Orderblocks:
- They act as resistance levels, causing the price to form Lower Highs.
- Traders should consider taking SHORT positions when the price reaches a Bearish Orderblock, anticipating a potential downward move.
4. Bullish Breaker
A Bullish Breaker occurs when a former resistance level is decisively breached, turning into a support zone.
4.1 Characteristics of Bullish Breakers:
- The breakout indicates upward momentum and attracts buyers.
- Traders use Bullish Breakers as support and look for confirmation to capitalize on bullish trends.
5. Bearish Breaker
A Bearish Breaker is a pattern where a previous support level is convincingly broken, now serving as resistance.
5.1 Characteristics of Bearish Breakers:
- This breakdown signifies downward momentum and draws sellers into the market.
- A Bearish Breaker often follows the failure of a Bullish Orderblock, marking a shift to bearish sentiment.