How To Trade OrderBlocks For High RR

In this post, I will show you how to trade orderblocks (OBs) for high risk to reward (RR). Before we begin with the strategy, go to the TradingView platform and open any currency pair that you want to test this strategy on.

And when I say test, I mean test it on the charts, without putting any real money. Once you are at the TradingView platform we can begin with our strategy.

How To Trade OrderBlocks For High RR Step-By-Step

Let me take you through the process step-by-step.

Step 1. Identify a Break of Structure on The 4H Time-Frame

The first and most important step for this strategy, is to identify a break of structure (BOS) on a higher time-frame such as the 4H timeframe. In this occasion, we have identified such BOS. Now it’s time to move on to the next step.

Step 2. Identify All OrderBlocks (OBs) Above The 61.8% Fibonacci Level For Great RR

We apply the Fibonacci Retracement tool from the swing high to the swing low. Then, we highlight all those 4h OBs that lie above the 61.6% Fibonacci level. On the above example, we see that price has reacted from the very first OB above the 61.8% level. All of the above is important, since we need to break down the strategy carefully in order to trade orderblocks for high RR.

Step 3. Scale Down to The 15min Time-Frame And Identify Major OBs

Now we scale down to the 15min time-frame in order to identify the 2 OBs that are closer to the “base” of the movement which broke structure on the low timeframe. Hence, we will trade only those OBs, in order to get high RR and a higher winning percentage.

Again, we need to break down price action in order to be able to trade orderblocks for high RR. All of the above is happening within the 4h orderblock, where we saw a reaction and then we scaled on the 15 minute timeframe. On the 15 minute timeframe we wait for a break of structure. When we see the BOS we identify the two 15 min OBs which are closer to the beginning of the movement which broke structure.

Step 3. Scale Down To The 3 Minute Timeframe And Break Down The 15min OBs

Here is the best step of how to trade orderblocks for high RR. The area you see on the image above, is one of the OBs that we highlighted on the 15 min time frame. Now, we will scale down to the 3 min timeframe and we will break the 15 min OB into two 3min OBs.

On the image above, we see how we broke down the 15min OB into two separate 3min OBs. Here is where the magic begins and this is how to trade orderblocks for high RR.

By breaking down the 15min orderblock into two separate ones we achieve the following: Let’s say that on the initial example we get activated at the 15min OB which had a SL of 8.6 pips. Furthermore, let’s assume that we target a 5/1 RR. All fine.

In the second occasion that we broke this order down into two separate ones, we would either get activated in the first 3min OB and we would win a 9/1 RR for the same 5/1 RR of the whole 15min OB, or we would get thrown out of the first 3min OB. Nonetheless, the point of SL of the first 3min OB is the exact point of activation of the second 3min OB trade. This is how we will trade orderblocks for high RR.

This would give us a -1 RR for the first 3min OB, but the second one would give us a 16.5/1 RR, so a total of 15.5/1 RR compared to initial the 5/1 RR that we would get from trading the 15min OB. This is how we can break down and trade orderblocks for high RR.

Furthermore, we would repeat the same exact process for the orderblock that lies at the beginning of the movement which broke structure on the 15min timeframe.

Here is my video on this strategy:

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Trading strategies (including this strategy on how to trade OrderBlocks for high RR) can be very risky if you do not control your emotions and if you do not have a strategy which is giving you a statistical advantage.

It is normal that you will go through periods of consecutive losses and consecutive wins as well. If you want to be able to calculate those aspects of trading in advance and build a robust winning strategy, then you can check out my courses.

In the courses, I teach you elaborate winning trading strategies. Furthermore, I teach you how to build a robust trading plan, starting with the importance of statistics and trading psychology. That way, you can take your trading to the next level.

As with all trading strategies presented here on ChrisFX, if you want to test them out, do so by trading with fake money, or otherwise paper money. NEVER test one of these strategies with real money. When and if you decide to do so, you do so at your own risk and I take zero responsibility for your actions.

Enjoy 🙂