INSTITUTIONAL ORDER BLOCKS

The INSTITUTIONAL ORDER BLOCKS indicator aims to identify potential bullish and bearish institutional order blocks followed by price imbalances to highlight high-probability reversal zones.

Usage

The Usage section describes how the script can be used to identify key market turning points. Traders can utilize the indicator to spot specific candles where institutions are likely entering the market against retail trends.

• Order Block Identification: The script highlights Bullish Order Blocks (BUB) and Bearish Order Blocks (BEB) based on specific price action and engulfing patterns.
• Visual Modes: Users can choose to highlight the specific Order Block candles, plot the zones (boxes), or use both simultaneously to better visualize supply and demand levels.
• Price Imbalances: The indicator specifically looks for order blocks followed by imbalances, which often suggests strong institutional momentum.

Details

The script is based on Inner Circle Trader (ICT) Institutional Order Block theory. An Order Block represents a price range where market makers or large institutions accumulate or distribute positions. When these entities move the price aggressively, they leave behind "blocks" that price often returns to for a retest before continuing the institutional trend. If an order block is breached, it may then be interpreted as a "Breaker" or a failed order block.

Settings

Chart Customization Candles

• Bearish OB Candle: Sets the color for candles identified as bearish order blocks.
• Bullish OB Candle: Sets the color for candles identified as bullish order blocks.
• Candle Transparency: Adjusts the visibility of the highlighted candles.

Chart Customization Box

• Show OB Boxes: Toggles the visibility of the rectangular zones extending from the order blocks.
• Bearish OB Box: Sets the color for the bearish zone boxes.
• Bullish OB Box: Sets the color for the bullish zone boxes.
• Box Transparency: Adjusts the visibility of the plotted boxes.

Chart Customization

• Maximum Box Displayed: Limits the number of historical boxes shown on the chart to maintain performance and visual clarity.

FAQ

How do I use the order blocks for entries?

Traders often look for price to return to the highlighted Order Block zone or candle to find high-reward, low-risk entry opportunities in the direction of the institutional trend.

What happens if an Order Block is broken?

According to the theory, if an order block is violated, it qualifies as a Breaker, and price may retest that specific level before moving in the opposite direction.

How can I access this indicator?

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