Order Blocks

The Order Blocks indicator identifies bullish and bearish order blocks on the chart and alerts the user when these institutional price levels are formed or mitigated.

Usage

The Order Blocks indicator can be applied to any timeframe or asset class to identify key zones where strong buying or selling pressure originated. Users can utilize these zones as potential points of interest for entries, stop-loss placement, or take-profit targets.

• Bullish Order Blocks: Represented by green zones, these are identified when the price closes above the high of a recent bearish candle, suggesting buyers have gained control.
• Bearish Order Blocks: Represented by red zones, these are identified when the price closes below the low of a recent bullish candle, signaling seller dominance.

The indicator includes built-in alerts for:

• Bullish Order Block Formed
• Bearish Order Block Formed
• Bullish Order Block Mitigated
• Bearish Order Block Mitigated

Details

Order blocks are conceptualized as areas where institutional participants have placed large orders, often leading to significant price reactions when the market returns to these levels. This implementation specifically looks for "breaks" of the previous candle's range to confirm the formation of a block. Once formed, a box is projected forward. A block is considered "mitigated" when price action retests and closes beyond the defined zone, suggesting the institutional orders at that level have been filled or the level is no longer valid.

Settings

• Show Bullish Order Blocks: Toggles the visibility of bullish zones.
• Show Bearish Order Blocks: Toggles the visibility of bearish zones.
• Order Block Duration (bars): Sets how many bars into the future the order block boxes will extend.
• Delete Mitigated Boxes After Mitigation: When enabled, zones are automatically removed from the chart once price retests and closes beyond the zone.
• Bullish OB Fill: Adjusts the background color and transparency of bullish order blocks.
• Bearish OB Fill: Adjusts the background color and transparency of bearish order blocks.
• Bullish OB Border: Adjusts the border color of bullish order blocks.
• Bearish OB Border: Adjusts the border color of bearish order blocks.

FAQ

How do I access Order Blocks?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

What causes an Order Block to disappear?

An order block will be removed from the chart if it reaches its maximum duration (defined in settings) or if the "Delete Mitigated Boxes" setting is enabled and the price action successfully mitigates the zone.

Can I use this on low timeframes?

Yes, the Order Blocks indicator is compatible with any timeframe. However, zones identified on higher timeframes (such as 4H or Daily) are often considered more significant by technical analysts.