MTF Order Block Finder

The MTF Order Block Finder indicator identifies institutional order block patterns across multiple timeframes to highlight high-probability support and resistance zones. It detects specific candle sequences—typically a contrarian candle followed by strong movement in the opposite direction—to mark areas where price rejection or explosive movement often occurs.

Usage

The Usage section describes how the script can be used to identify key market structures. Order blocks are treated as supply or density zones where institutional activity is concentrated. Users can identify these zones to anticipate potential price reversals or breakouts.

Core Identification

A Bullish Order Block is defined as a downward candle (Bearish) followed by a specified number of consecutive upward candles. Conversely, a Bearish Order Block is an upward candle followed by a sequence of downward candles. The indicator marks these areas using boxes or lines, which act as dynamic support and resistance.

Timeframe and Filtering

Users can set the indicator to scan for order blocks on a different timeframe than the current chart (MTF). For example, a trader on a 5-minute chart can display 1-hour order blocks to find significant macro levels. Filtering options allow users to exclude "weak" order blocks by requiring a minimum percentage price move or a specific number of consecutive candles in the sequence.

Visual Styles

The tool offers two primary drawing styles:

• BOX: Creates a shaded rectangle covering the price range of the order block candle.
• LINE: Draws three distinct lines representing the High, Low, and Mean (average) price of the order block candle.

Details

The script utilizes a lookback mechanism to validate the sequence of candles following a potential order block. It calculates the total percentage change from the close of the first candle to the close of the last candle in the sequence to ensure the move has sufficient momentum (defined by the "Order Block Required Move %").

Source Selection Algorithms

The indicator provides three methods for determining the vertical boundaries of a zone:

• High/Low: Uses the absolute High and Low of the source candle.
• OHLC: Uses the High/Low to the Open/Close, focusing on the candle body and the wick in the direction of the move.
• Context: A specialized algorithm that searches nearby candles (within a user-defined search length) to identify the most significant wick, providing a more comprehensive zone based on local price action.

Settings

Basic Configuration

• Order Block Timeframe: Sets the timeframe from which order blocks are calculated (e.g., 1D, 4H).
• Order Block Required Length: The number of consecutive candles required in the opposite direction to confirm a block.
• Order Block Required Move %: The minimum percentage price change required for the sequence to be considered valid.
• Bullish/Bearish Zones to Show: Limits the number of active zones displayed on the chart to maintain clarity.

Advanced Configuration

• 1st Candle Filter: Filters out "Doji" or small-bodied candles at the start of a pattern based on a minimum % move.
• 2nd+ Candle Filter: Allows "imperfect" sequences by accepting candles with a very small % move regardless of direction (useful for ignoring mid-sequence Dojis).
• Order Block Draw Distance %: Only draws zones that are within a specific percentage distance from the current price.

Style and Colors

• Zone Drawing Style: Choose between BOX, LINE, or BOTH.
• Bullish/Bearish Zone Color: Customizes the visual appearance of the detected zones.
• Line Width: Adjusts the thickness of the High, Low, and Average lines.

Experimental Settings

• Order Block Candle Shift: Shifts the specific candle used as the source for the zone drawing.
• Order Block Source Selector: Determines which price points (High/Low, OHLC, or Context) define the zone boundaries.
• Order Block Context Search Length: Sets the lookahead/lookback range for the "Context" source selector.

FAQ

How can I trade using these zones? These zones are best used as areas of interest for support and resistance. Traders often look for price rejection (long wicks) or confirmation from a secondary entry indicator when price enters a Bullish or Bearish zone.

Does this indicator repaint? Yes, the indicator may repaint historical labels as the "Bear" and "Bull" signals identify the source candle after the required sequence has completed. This is intended, as the zones are meant to highlight historical areas of institutional interest rather than provide real-time "buy/sell" triggers.

How do I access the MTF Order Block Finder? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.