Orderblocks (Nephew_Sam_) - Open source

The Orderblocks (Nephew_Sam_) indicator highlights key institutional supply and demand zones based on fractal market structure to identify high-probability reversal points. It provides a systematic way to visualize where significant market participants may have placed large orders by identifying the specific candles preceding a break in market structure.

Usage

The Usage section describes how the script can be used to identify potential entry and exit zones based on price action. Traders typically use these zones to look for retracements where price might find support or resistance.

• Zone Identification: When the market breaks a prior fractal high or low, the script identifies the last "opposite" candle (the orderblock) and projects it forward as a shaded area or set of lines.
• Filtering with FVGs: Users can choose to only display orderblocks that are immediately followed by a Fair Value Gap (FVG). This often indicates a higher level of institutional conviction and momentum.
• Mitigation: The tool can be configured to remove or "delete" zones once price has traded back into them (mitigation), helping to keep the chart clean and focused on fresh liquidity zones.

Details

The script operates by tracking fractal highs and lows (3-bar or 5-bar configurations). When a fractal is breached—either by a candle close or a wick touch, depending on settings—the script searches backward to find the candle that initiated the move.

Market Structure Break (MSB)

The core logic triggers an orderblock search only after price confirms a change in local structure. A bullish orderblock is defined as the last down-close candle before a move that breaks a fractal high. Conversely, a bearish orderblock is the last up-close candle before a move that breaks a fractal low.

Fair Value Gap Correlation

Research into "Smart Money Concepts" suggests that orderblocks followed by an imbalance (FVG) are more likely to act as strong support or resistance. This indicator includes a logic gate to check if an imbalance occurs within a specific bar distance from the identified orderblock.

Settings

Fractals

• Show Fractal Points?: Toggles the visibility of the fractal high/low shapes on the chart.
• Filter 3/5 bar fractal: Determines the sensitivity of the fractal detection (3 bars for more frequent signals, 5 bars for more significant structural points).

Orderblocks

• Find OB after fractal break of close/HL: Sets whether a structure break is triggered by a candle close beyond a fractal or simply a wick (High/Low) touch.
• Filter only OB that follow with FVG?: When enabled, only shows orderblocks that result in a market imbalance.
• Max bars between the OB and FVG: Defines how close the FVG must be to the orderblock to be considered valid.
• Line Height: Choose whether to draw the zone boundaries based on the candle Body or the full Wick.
• Delete lines after fill?: Automatically removes the orderblock lines once price has mitigated the zone.

Styles

• Lines style: Changes the visual appearance of the zone boundaries (Solid, Dashed, or Dotted).
• Length of lines: Sets how far the lines extend to the right of the chart.
• Lines Width: Adjusts the thickness of the zone levels.
• Bear/Bull OB Line color: Customizes the colors for supply and demand zones.

FAQ

How do I interpret an Orderblock? An orderblock represents an area where institutional buying or selling occurred. Traders often wait for price to return to these levels to look for "re-entry" opportunities in the direction of the structural break.

What is the benefit of filtering by FVG? Filtering by Fair Value Gaps ensures that you are only looking at orderblocks that created a significant price imbalance, which often suggests higher volatility and stronger interest from large-scale traders.

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