High Probability Order Blocks

The High Probability Order Blocks indicator is a statistical analysis tool that detects and visualizes institutional order blocks by combining volatility-based z-score triggers with a Kaplan-Meier survival model. It aims to provide traders with a probabilistic perspective on zone strength by estimating the likelihood of an order block remaining unbroken based on historical mitigation data.

Usage

The script dynamically manages bullish and bearish order blocks on the chart, providing real-time data for each zone.

• Survival Probabilities: Each block features a label displaying Age | Survival %. A higher survival percentage indicates that blocks of that specific age have historically persisted longer, while "N.E.D." appears when there is insufficient data for a reliable calculation.
• Survival Curves: The Kaplan-Meier curves on the right side of the chart illustrate how the probability of a zone's survival decays over time. This helps traders align entries with the side showing stronger historical resilience at the current age.
• Rejection Signals: Rejection markers (▲ for bullish, ▼ for bearish) plot when price tests the boundary of an active block and fails to break through, providing confluence for potential entries.
• Visual Management: Use the "Prevent Overlap" setting to maintain chart clarity and adjust the "Max Box Age" to suit specific timeframes and trading styles.

Details

This tool identifies regions of strong institutional interest by using z-score thresholds to detect statistically significant directional moves. A bullish block is identified when a strong upward move follows a down candle, and vice versa for bearish blocks.

The unique "survival" aspect is inspired by Kaplan-Meier estimation used in medical and engineering statistics. When a block is "mitigated" (price closes past the opposite side), it is logged. These logs inform a survival curve that estimates the probability of future blocks remaining intact. This method shifts order block trading from a purely visual exercise to a data-driven, probabilistic approach.

Settings

Calculation

• Prevent Overlap: Avoids creating new order blocks if they overlap with existing active zones.
• Z-Score Window (bars): The number of bars used to normalize price distance. Higher values result in smoother detection; lower values are more reactive.
• Max Box Age (bars): Automatically expires order blocks after this many bars if they have not been mitigated.

Reliability Calculation

• KM Training Window (zones): The number of recent mitigated blocks used to calculate the survival curve. Higher values provide more stability.
• Minimum Sample Size: The minimum number of mitigated blocks required before the script will calculate and display survival probabilities.

Appearance

• Show KM Panel: Toggles the visibility of the Kaplan-Meier axes, grid, and curves.
• Bullish/Bearish Colour: Customizes the colors used for the blocks and their respective survival curves.
• Probability Text Size: Adjusts the size of the survival data text inside each block label.

FAQ

How do I interpret the Survival %? The percentage represents the historical probability that an order block of that specific age will not be mitigated. A 75% survival rate means that historically, 75% of blocks reached that age without being broken.

What causes an order block to disappear? A block is removed from the active display if it is mitigated (price closes through it) or if it exceeds the "Max Box Age" defined in the settings.

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