Master Order Blocks to Trade like Banks (no bs guide)

90% of retail Traders will enter for a buy position right here because they see that price is about to go up right now after it has retraced but the next thing you know price comes down hit the stop loss and then go up and you're stuck there wondering why does that happens and that happens because guess what there's an auto block at this area right here so this is where the financial institutions the big Banks the smart money are entering for the trade and you can see they were able to grab liquidity by stopping you out and just pushing the price back up it's absolutely ridiculous but this is how the market operates and there's nothing you can do about it unless you understand how they trade so you can trade with them so here's what you will learn what are order blocks how to identify order blocks and three rules of valid order blocks so that you can determine which order blocks are going to work and which one do not work and lastly I'm going to show you my profitable order blocks trading strategy that I've been using for quite some time now now I have back tested this strategy and it has proven to be profitable so you can trust me on this one now firstly what are order blocks aut blocks are basically areas where smart money are entering buy or sell orders in large amounts you must understand the market moved based on liquidity it needs liquidity to create this large price movements so over here you can see in this example right here price did not have the strength to move up until it actually break through the order block a little bit and then that is when you can see the smart money enter for a buy position right here and you can see probably just skyrocketed so basically order blocks where smart money they are entering for a lot of buy or sell orders and this creates liquidity that is able to move the market now the question becomes how do you identify order blocks I have this simple three-step process which you can follow the first step is to find a drastic and sharp price move and and this is what we call an inefficiency right where price has created this huge move most likely because smart money have entered the trade and they have entered a large amount of orders so price has to come back down to this AEL to fuel up the inefficiency and the next thing you want to do is to identify the candle before the move before the inefficiency happen and you basically just want to Mark the high and the low of the candle and that will give you the order block Zone now you must understand that not all order blocks work there's some order blocks that will failed and you don't want to be taking trads on those order blocks that fail so I have these three rules which Define to me whether it's a valid or invalid auto block the first rule is there must be some sort of presence of inefficiency there must be momentum which tell us that smart money have actually entered for this straa right here and that creates this inefficiency and in the future price have to come back down to this AA to fill up that inefficiency so in order for that to be inefficiency there must be a gap for the candle before this large move and after the large move if you look at this one right here you can see this is the high this is the before candle and this is the high and this is the after candle and this is the low you can see it forms this huge gap and this is what we call our inefficiency and then on the other hand you can see in this case this was the DraStic move but then before that this was the high and then after candle this is the low you can see there is no Gap right price literally came down to this exact same area where it went up to last time so there was no Gap that is no inefficiency making this an invalid order block and making this a valid order block right here now the second rule is that it must create breakoff structure what does it mean to have break off structure we know that in an uptrend price will never go up in a straight line price has to go up retrace a little bit go up retrace a little bit go up and retrace a little bit creating what we call the higher highs and higher lows and in this case when price is creating higher highs and higher lows it will also create break of structure every single time price break the previous High it will create what we call the break of structure you can see right here there we have your break of structure once again price break through the last higher High create another break of structure and then when price once again breaks the last High it creates another break break off structure that is why in order for an order block to be valid it has to create breakoff structure so after you have identified the break of structure you want to find the origin point that leads to this break of structure which is this move down here all this move down here and there you have all your order blocks right there so as you can see right here after price has broke structur it come back down to retest this order block we have right here before pushing up even further and then same thing right here price comes back down we that's this order block before pushing up and breaking through structure so now we can expect price to come back down to this order block that we have right here and create another higher high before I move on to the next rule let me drink some tea now this is actually a secret heck but T actually helps you to become a profitable Trader 10 times faster because it improve focus now the next rule is that auto blocks are a one-time use so in this case right here look at what price did the the second candle after the DraStic move after price has created this inefficiency it actually went back down to touch this order block that we have created earlier right so this was once again the inefficiency and then this is the order block and you can see the second candle actually come back down touches the order block before going up so this is what we call a mitigated order block right price has already touched the order block and then go right we don't want something that is used we want something that is new and this means that this auto block is invalid now let's look at another scenario here where the second candle after the inefficiency actually did not touch the auto block so in this case this is an unmitigated order block and that makes it a valid order block now those are the three rules that define whether an UT block is valid or invalid and you want to make sure that you preserve your Capital so that you can actually trade the high priority UT blocks the UT blocks that actually work instead of wasting your precious hot earn money on those order blocks that were failed now let's go to the charts so I can show you my own profitable order blocks trading strategy that actually works okay for this strategy to work you have to understand the basics of Market structure and what I call the Market shift so let's look at a bullish scenario first so in this example right here you can see price has created a higher high higher low and another higher high and right now you can see price has just broke the last higher low when this happens this this is what we call a market shift right so this is what we call the Market shift so right here this Market shift has tell us that there is a potential Trend change that is a potential that this uptrend is done and right now price is going to reverse to become a downtrend at this one of time after you have spotted the market shift what you want to do is to look for the inefficiency which will be somewhere right around here that push price all the way down here and break through the last higher low and then you can draw an block right here if you remember how we draw our order block is basically the candle that is before the inefficiency so what we want to do next is to patiently wait right we want to wait for price to go back up to actually retest this order block right here remember just now price created some sort of inefficiency right here and price has to come back up to this order block are to fill up that in efficiency after price has come back up to mitigate this auto block that is when we can look for our sell position right here place our stop loss above the order block and place our take profit maybe all the way down to this low right here and you will start seeing price literally collapse and you can see price has just created a lower high and a potential lower low right here and that is how price has shift from a uptrend to a downtrend a proper reversal now if you look at a bearish scenario it's pretty much the opposite of the bullish scenario in a downtrend price is creating a lower highs and lower lows why is it lower highs here it's is actually lower lows so price is creating a lower highs and lower lows and what we want to do is to wait for some sort of Market shift right and this is the last lower high so in order for Market shift to happen price has to break through the last lower high right there and then we have your Market shift right here ladies and gentlemen so what we want to do is to wait for price to come back down to this other block that created this Market shift which will be somewhere right around here so we for price patiently until price come back down here mitigate this auto block and then that is when we can enter for our buy position right here and take it all the way up now as simple as that sounds how do you know that price is ready to go up what is the perfect timing right so that is why when price reaches this order block what we want to do is to drop down to the small time frame like the 15-minute time frame to look for our entry look for another Market shift let me show you what I mean so before you do anything the first thing you always want to do is to make sure that you identify the trend Direction and in this case we can see that price is creating a higher highs and higher lows and another higher high so that is why price is creating a break of structure right here so this is what we call a break off structure right this High has just broken past the last High earlier now these are the highs so where are the lows so this would be the last higher low right here right so this is the last higher low right here so in order for Market shift to happen we want to wait for price to actually Pierce through the last higher low to give us a signal that tell us that the trend is about to change so in this scenario we are still patiently waiting and you can see right here price has just broken past the last higher low and just continue going down creating what we call a market shift right here now at this point of time after price has created our Market shift we don't want to do anything remember we want to wait for price to get to our order block that created this Market shift so at this part of time what you could have done is that go down to like the smaller time frame or even a 15-minute time frame and you can see there's a inefficiency being formed right here right there's a lot of liquidity right here this is where smart money have entered for the trade first step identify your inefficiency second step is to look for the candle before this in efficiency is form which will be right here and you can just drag it out and you can see this is the order block but be in mind this is the extreme order block right this is like the highest point before price wents down and you can actually spot another order block right here right there's another order block right here because there's actually another liquidity push right here that actually caus this Market shift right here so right here we have another mini order block right here so right now we have an extreme order block and a normal order block and the thing about price is that price usually will not come up to this extreme auto block block because price has already scripped liquidity so what you want to do is to wait for price to come back up to this auto block that actually created this mini lower high right here so at this point of time we still patiently waiting for price to get back up to this order block right here so in this case what you could have done is to place like a sell limit order at this order block right here so that when price comes up to mitigate this order block you will automatically get into a sell position your broker will do it for you or another thing you can do is to actually place an alert at this a so that when price touches this auto block your broker I mean trading view will send you a message telling you that hey bro you should enter for a sell position right now so in this case I'll place like a sell limit order right here and I'll place my stop loss above this order block right here and my take profit most likely all the way down here at this next order block you can see if you look towards the left this is another inefficiency and you can see there's actually another order block right there so right now we are still patiently waiting and you can see price is slowly getting up to this order block right here and is not touching the order block yet so we don't want to enter for the trade yet so we still wait and wait and wait and wait patiently patiently until price mitigate the order block right here you can see the moment price touches this all block right price actually created this downward move right here so you could even go down to the 5 minute time frame or even the 1 minute time frame and you can see that that's actually already a market shift that's already a trend change right you can see what I'm talking about here is price was actually doing this mini retracement right creating your higher highs higher lows higher highs and higher low higher highs and higher low and look at what happens right here this is the last higher low somewhere right around here and you can see there's another Market shift right here another Market shift right here and look when price created this Market shift guess what price also created the order block that lead to this Market shift which is somewhere right around here and look at what price did price comes back up to mitigate this order block area right here so in this case this is like our small time frame order block so this is could be like a 5 minute order block right and if you genuinely want to get that sniper entry right what you could have done is to get in on this 5 minute aut block right and actually take it all the way down here and in that case you will have like a fairly tight stop loss right there but in this case let's let's assume that you did not get the best entry on this trade and you actually ended up entering right here for a sell limit order because price has mitigated this order block on the higher time frame and look at what price does next price eventually goes down smash or take profit with a lot of liquidity I really want to make sure that I emphasize the importance of Auto blocks by asking you to look at the candlesticks this show us liquidity momentum s in pressure and that is all because the smart money have entered the trade at this a block earlier that we have right here and also even enter at this 5 minute UT block right here and that results in this drastic move this is really how powerful UT blocks can be if you genuinely grabs the concept of it as you can see the market is fractor right this pattern that we see earlier on the 1 hour time frame remember our entry model where we look for the market shift and then inefficiency and then the order block right here it shows you the exact same thing on a 5 minute time frame so this is the proof that this autobo strategy works on all time frames but ideally you want to start off from like at least the 4 Hour or the 1 hour time frame and then slowly go down to the 15 minute or the 5 minute time frame to look for your entry now that I've shown you a bullish scenario let me show you a bearish scenario so the funny thing is I've actually taken this trade so this is somewhat like a trade recap for me I took this trade about last week and it played out pretty well so you know what let me just explain to you so in this case price is downtrend right because price is creating a lower highs lower lows lower highs and another lower low somewhere right down here and right here price has given us an inefficiency you can see price has maybe approached this major key demand zone or support level whatever you like to call it and price has started reversing in this case this is what we have as your inefficiency so I can use the box to mark up the high and the low of the candle before the in efficiency happen creating your order block right here so like I said the next thing you want to do is to wait for the market shift to happen so maybe I'll drop down to the 1 hour time frame and I can see that okay there is actually a lower high right here price is actually creating a lower high right here this is the last lower high before price has came back down to this area here and create this new lower low so price is most likely going to break through this last lower high creating your Market shift and then come back down to this order block and that is when we can look for our buy position right here so in this case we are waiting patiently right we are waiting very patiently and you can see right here price has actually broken past the high that we have earlier remember this is the lower high right here and you can see this weak right here has pierced through that last lower high creating your Market shift so in this scenario we have Market shift and now we have price come back down to to retest this auto block that created this inefficiency and actually created some sort of liquidity liquidity and we can see that by looking at this candle right here right you can see this candle is the bod is actually bigger than this one right here so there was bullish momentum at this area right here so at this point of time I'm going to drop down to my smaller time frame like the 15minute time frame to look for my entry and when I dropped down to my 15-minute time frame I saw price created this another inefficiency right here you can see this is a inefficiency right so what I did was that I actually end up for a buy position right here but a more sniper entry would be to wait for price to come back down to this mini 15 minute order block right here then look for an entry somewhere here but I entered for a buy position right here and I placed my stop loss below this last higher low because you can see price was creating lower highs lower lows lower highs low lows and now price has shift right the trend has shift to higher highs higher lows higher highs and and this is a new higher low so I plac my stop loss below this last higher low and I place my take profit all the way up to the next a the next demand Zone which is like all the way up here or some this order block right here this extreme order block right here was my take profit a but this trade actually didn't went up to hit my take profit a so in honestly right here I'm going to be 100% transparent with you guys to tell you that you shouldn't in for this EX streem order block you should aim for the next order block which could be somewhere right around here right somewhere right around here that's this Market shift AA this lower high being form right here this is the last high and there some sort of demand area right here and you could have aim for that easily now in this case this was a 1 is to one R to reward ratio which is not ideal so I would actually advise you to drop down to the 5 minute time frame to look for a better entry right when price has come back down to this order block right you could have immediately entered for for trade by placing like a buy limit order at this price right here and just immediately entered for the trade when price has touched this order block I entered right here which is a little bit too late but literally the best entry price would be when price has mitigated this order block and you can take profit at this area that we have right here so in that case that is a one is to five RIS to reward ratio and you can see price actually slowly went up and smash a take profit right here now as always I want to be the guy that's % transparent and honest with you and just be honest with you and tell you that my take profit did not hit right price did not went all the way up here to this extreme auto block PR actually come back up to this aut block area right here and that's all trading is about right learning from your mistakes adjusting your trading strategy so that you do not commit the same mistakes again and that is how you can improve as a Trader I learn my mistake and now I'm just sharing um the lesson that I learned from this mistake with you guys so that you guys do not make the same mistake I did and actually lose money like I did okay I didn't lose money I actually break even on this trade all right let's make that clear because I was smart enough to move my stop loss into break right here yo this is Brett so I actually took a live trade after this video was recorded based on the exact same Auto blocks trading strategy that I told you guys in that tutorial so as you can see right here this was the market shift that we can see right here and then this was like the aut block that kind of created that market shift so around here and price has stepped into it right there and now it's going up right now and I enter a little bit too late because I wasn't looking at the charts I was busy recording this goddamn video for you guys so I end up right here and I wouldn't say it's too late I mean yeah it's it's pretty too late but that doesn't mean that we cannot enter the trade that doesn't mean that there is no opportunity right once I saw this liquidity I knew that I had to ship my shot so I can prove to you guys that this strategy actually works somehow so I ENT up for this trade right here and another thing was because this was actually an old order block from on a 4our time frame if I'm not wrong on a 1 hour time frame right here you can see right here this is an old order block and you can see price has mitigated this area as well so not only price has mitigated this one hour order block right here but it has also mitigated the 15- minute auto block that we have right here somewhere right around here so I'm going to check back again to share you guys the results of this trade probably in few hours and if it's a win it's a win if it's a loss it is a loss it is what it is just got to like see how how you guys do it I mean see how I do it in live so as you can see this is purely live IG account Live account and then you can see that this was a trade that I entered right this is is in a little bit of draw down right now but we're just going to be patient and hold this trade and see how it end UPS you know whether it's a profit or a loss it is what it is and yep hopefully it's a win so that I can actually prove to you guys that you know what this strategy is actually legit and I'm not spitting so we enter for the buy position right here and right now price is somewhere right around here and at first my take profit was all the way up here but because today is a Friday and I don't want to hold a trade over the weekend so I decided to take profit at this Supply Zone area right here so I got out the trade as you can see right here 200 fat bucks I guess this just proved that our aut block strategy is quite useful because right after I enter for this trade right here you can see liquidity enter into the market and just push the price up right this was somewhere during the London session and stuff and I can see oh right now price literally went up do you guys see that and right now I'm getting like you know the emotion where you regret getting out of the trade but anyways it is what it is even though oh my god look price hit my take profit right here like if I held it a little bit longer why is this happening because right here I I'm pretty sure there's news right right here oh my God if I just held the trade I think there's a news coming out today that's why I forgot about that and yeah I can't believe that just happened to me it is what it is we miss opportunity sometimes you know I could have made like double profits if I held it a little bit longer but it is what it is you know we got out over here um it was a pretty good trade right and the reason why price come up to this area here is because there's actually another order block area right here there's a supply order block right here that where smart money are loading up sell orders right here so we just have to see what happens anyways this has proven to you guys that this auto block strategy kind of works so go and test it out anyways this is like the first lesson of this Market mechanics trading strategy that I've formulated so for the past few months or the past few weeks I've really been trying to create my own trading strategy called Market mechanics and other the blocks is just one part of it there's other parts like supply and demand flip zones inducements all these like complicated terms which I will explain in more videos in the future but yeah this just the first video so if you really enjoy this style of video where I just use PowerPoint slides to show you you know uh what is auto blocks what is this what is that and just explain to you guys how it works and then show you my trading strategy on the charts let me know down in the comments so that I know that you appreciate this typ of videos and I'll most likely create more videos like this and also make sure you smash on that like button okay that sounds cringy because I don't want to be that YouTuber that says oh smash on the like button hit the Subscribe button you can do it if you want I'm not going to Force you all right if you think that my channel provide value to you go ahead and hit on that subscribe button if not then just don't all right just F off I really think that if you can just forget about things you know about me forget about what other people are talking about me forget about all the that they are saying about me and just focus on trading focus on the thing that I'm saying and actually apply the knowledge that I'm transcending to you right now I believe that you can actually become a profitable Trader and you do that by putting your buyers off me aside and just focus on trading and focus on what I'm teaching right here and applying all this knowledge and I can guarantee you that you will get far in trading and and this is something bold that I'm going to say but I believe that I've literally cracked the algorithm of the market and figure out how price operates through my market mechanics trading strategy right like I said I'm going to do my best and just create like a new series where I just post tutorials on parts of this Market mechanics trading strategy to slowly like teach you guys how I trade market mechanics and how I'm able to you know understand how price operates and stuff so that you can do it too now if you've been watching my videos you will know that I've been trading price action for a very long time right now and I've taught you guys how to trade price action how to trade your support and resistance levels your candlesticks your trend lines and all that stuff now a lot of these things are retail Concepts and some things do not work anymore right that is why I want you guys to really focus on my newer video videos moving forward focus on Market mechanics right and actually Market mechanics there's a portion of it which is price action so I'm not saying that I'm I've stopped trading price action completely I'm still looking at Price action right now especially when I'm trading these order blocks I have to understand okay the liquidity the momentum the kesti pressure and all that stuff and I'm still using Fibonacci and these tools to help me right Market mechanics is just like a hybrid trading strategy which is everything jump up together which I don't want to tell you guys too much right now it should be a surprise right to keep you watching to keep you hooked but I guess what I'm trying to say is that price action was just the beginning it was just the beginning for you to kind of understand how price operates Market mechanics is the one that is going to take your trading to the next level where you actually figure out why or rather how liquidity is formed how liquidity is created and how smart money manipulated to their advantage and how you can take advantage of it as well so if you're interested in Market mechanics I guess you can just you know be part of the tribe and just you know join us on this journey but once again I'm not trying to sell you anything or force you to do anything that you don't want to do and this auto block trading strategy only works if you can make use of top down analysis which you can check out in this video right here and as always remember you're just one trade away now I forgot to mention one thing actually and that is to make sure that you back test your trading strategy back test this auto block trading strategy that just showed you guys right it works for me I've back tested it myself I've literally traded it on my life account and I got like the best entries ever but it might not work for you because you're a freaking idiot so that is why you need to go out there and actually back test it right to see whether it works for you because what works for me might not work for you so go and back test it and don't be a freaking idiot

Channel: The Trading Geek

Views: 422,664

Keywords: trading, the trading geek, smart money trading, smart money strategy, forex trading strategy, smart money concepts, order blocks, best forex strategy 2022, banks trading strategy, order blocks forex, forex strategy tutorial, advanced trading strategies, smart money, smart money trading strategy, smart money trading course, smart money trading strategy crypto, besttradingviewindicators, crypto, ftmo, make money at home, mt4, nasdaq trading strategy, order blocks strategy

Id: MxygA1AFspI

Length: 27min 48sec (1668 seconds)

Published: Sun Mar 03 2024