How to Make Profits With OrderBlock Trading
In this article, I show you how to make profits with Orderblock trading. For the purpose of this video we will go through an example on Gold (XAUUSD).
Once again, we will be doing our analysis on the TradingView platform, since it is the best and most convenient platform to work on.
I will now take you through the process, which is very simple and straight forward.
How to Make Profits With OrderBlock Trading Step-By-Step
Step 1. Follow The Most Recent Price Action And Identify Possible Change Of Character
We begin our analysis on the Daily timeframe. Hence, each candlestick represents 24 hours of price action. Daily candlesticks hold high significance due to the fact that there are many orders taking place from many different timeframes.
Now I will take you through how to make profits with orderblock trading. It is simpler than you might be thinking. All we have to do is follow price action.
On the image above, we clearly see a Break of structure which might indicate that we will now enter a short or even a long downtrend. In other words, we notice the so called change of character.
Step 2. Identify A Break Of Structure And Then The Most Recent Order Block On The 1D Time Frame
On the image above, we can see three separate breaks of structure on the 1D time frame. Furthermore, the yellow arrows are pointing out on the 3 different order blocks which are relevant to us. Now that you have gone through these steps, I will take you through how to make profit with orderblock trading.
Step 3. Wait Price To Retrace And Re-Test The 1D Orderblock In Order To Make Profits With Orderblock Trading
Now we have scaled down on the 1H time frame and we see price reacting from the daily orderblock, after it has induced traders into entering early trades several times.
Now we will see how we can profit from orderblock trading after the reaction on the 1D timeframe.
Step 4. Identify A Break Of Structure On The 1H Time Frame After The 1D Time Frame Reaction Has Taken Place
We now see a break of structure on the hourly time frame, after price reacted from a daily order block.
All we need to do now, is identify the most relevant order blocks from the 1H timeframe, and wait for price to react from any of them. As we can see, price has already reacted from the first 1H orderblock.
Once we see the first 1H bearish candlestick, we place a sell order with a market execution. The stop loss will go either above the bearish candlestick, or above the overall 1H orderblock area, as seen on the example above.
For profit taking, we target the previous swing low from the Daily time frame. This will give us a great reward to risk. Furthermore, this is a swing trading strategy. You can be sure that you will not be missing any opportunities, since they happen more scarcely.
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Trading strategies (including this strategy onHow to Make Profits With OrderBlock Trading) 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 🙂
