Order Blocks
SMC Order Block Settings by Sonarlab
Overview
You will learn What is an Order Block and How to use the Order Block Settings in the Sonarlab Indicator
What are Order Blocks (OB)
Institutional money enters the market algorithmically at key levels in increments known as order blocks. Rather than entering hundreds of millions in currency into the market at once, institutional orders are broken up into multiple entries creating tight consolidations that we see right before an impulsive movement in the market. This method leaves an institutional footprint on a chart that can be identified and capitalized on.
It is categorized into two types:
Bullish Order Block (OB) Bearish Order Block (OB)
We Sell in the Bearish OB and Buy in the Bullish OB
Strong Supply and demand zones
They increase in strength when price broke swing structure.
They increase in strength when price leaves imbalance/ fair value gap
Order Block Settings
Internal Order Blocks: Show or hide the Internal Order Blocks. Order Blocks that are created when a Internal BOS or CHoCH happens.
Swing Order Blocks: Show or hide the Swing Order Blocks. Order Blocks that are created when a Swing BOS or CHoCH happens.
Order Block Style: [OB Zone] - An Order Block will be placed on the candle [OB + Flip Zones] - An Order Block will be placed on the candle, but once mitigated, the Order Block will continue to stay on the chart and can be used as a Flip Zone [Mark OB Candle] - Option to place a mark on the Order Block Candle, keeping the chart clean, and allowing you to draw the boxes yourself from the marks [OB Stop] - The Order Block will stay on the chart once mitigated, and will stop extending on the chart
Invalid OB After: Options what determines an Order Block to become mitigated (disappear from the chart) [Wick] - The Candle High breaking through the top side of a Bearish OB Box. Opposite for Bullish [1 Close] - A Candle Close through the top side of a Bearish OB Box. Opposite for Bullish [50% Mark] - A Wick breaking the the 50% mark of an OB
Draw Bullish OB: Choose how the Bullish OB is drawn
Draw Bearish OB: Choose how the Bearish OB is drawn
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