Orderblocks Flashcards
What is an orderblock?
An orderblock is the leg up or leg down that causes a liquidity sweep.
Explain what a bearish orderblock is.
A bearish orderblock is the move up that takes out an old high (sweeping liquidity), ranging from the bottom of the leg to the wick at the top that sweeps liquidity. After the sweep, price reverses to the downside but when it enters the actual orderblock again, it hastily moves back to the downside as market makers fill the sell orders within the orderblock.
Explain what a bullish orderblock is.
A bullish orderblock is the move down that takes out an old low (sweeping liquidity) before price reverse to the upside. The actual block is from the top of the move down to the bottom of the wick that sweeps liquidity (takes out the old high). Following the reversal caused by the liquidity sweep, if price retraces back into the orderblock, it surges to the upside as market makers fill the high potential buy orders that sit in the orderblock.
Can orderblocks have retracements within them?
No. Orderblocks can be many candles as long as they are consecutively the same (all bullish or all bearish candles).
How are orderblocks invalidated/disrespected?
Unlike FVGs, if there is even a wick outside of the orderblock (let alone a candle closure), the orderblock is invalidated.
