Pivot Order Blocks

The Pivot Order Blocks indicator automatically identifies and plots institutional supply and demand zones based on confirmed pivot reversal candles to highlight high-probability reversal areas. By anchoring boxes to the open and close levels of pivot highs and lows, the tool provides traders with visual support and resistance zones that can be used to anticipate price reactions.

Usage

The Usage section describes how the script can be used to identify key market structure levels.

• Support and Resistance: Pivot points naturally act as price floors or ceilings. This indicator enhances these points by marking the entire pivot candle body as a zone where institutional "order blocks" may reside.
• Trend Reversals: Traders can look for price to return to these boxes to find entries. For example, in a bullish scenario, a trader might wait for price to pull back into a Bullish Order Block (green box) before looking for long opportunities.
• Mitigation Tracking: When the "Extend Boxes" feature is enabled, the boxes will continue across the chart until price "hits" or mitigates the zone. Once a zone is touched, it changes color to gray, indicating the order block has been tested.

Details

The script functions by identifying local peaks and troughs using a lookback and lookforward period (left and right lengths). When a pivot high or low is confirmed, the script draws a box on the specific candle that formed that pivot.

The tool offers flexibility in how the zones are calculated, allowing users to switch between using the "Wicks" or the "Bodies" of the candles as the source. When using "Bodies," the box boundaries are defined by the open and close values of the pivot candle. If "Wicks" are chosen, the extremes of the candle are considered.

Settings

Pivots

• Source: Determines whether the pivot logic and box boundaries are based on candle "Wicks" or "Bodies".
• Pivot High: Controls the number of candles to the left and right required to confirm a pivot high.
• Pivot Low: Controls the number of candles to the left and right required to confirm a pivot low.

Plots

• Bullish Color: Sets the color for demand zones (Bullish Order Blocks).
• Bearish Color: Sets the color for supply zones (Bearish Order Blocks).
• Closed: Sets the color for boxes that have already been mitigated by price.
• Extend Boxes: If enabled, zones will extend indefinitely until price trades into them.
• Box Size: If "Extend Boxes" is disabled, this setting defines the fixed horizontal length of the boxes in candles.

FAQ

How do I use these zones for trading?

These zones are best used as areas of interest. You can look for price action confirmation, such as a rejection candle or a lower timeframe shift in market structure, when price enters a Pivot Order Block.

What is the difference between "Wicks" and "Bodies" settings?

Using "Bodies" creates tighter zones based on where the majority of trading volume occurred (open/close), while "Wicks" creates wider zones that encompass the absolute price extremes of the pivot candle.

How can I access Pivot Order Blocks?

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