Today I am trading a possible Order block setup on EUR/USD in the 4-Hour time frame.
Looking left, we can see that we had 4 wicks touching the previous support level. We then had a candle push through and close below that level.
This setup is very similar to yesterday's post on AUD/USD. The same rules for the position have been met.
I looked for the most recent bullish candle before the bearish impulse sending the price below this support level. I highlighted this candle from bottom wick to top wick and extended it right. This yellow zone is called the Order block zone. We can also abbreviate it and call it the OB zone.
I am now waiting for the price to retrace back into this yellow OB zone before opening up my short position targeting the previous price structure around the 0.997 price position.
EUR/USD is still bearish in my opinion. This means I am still looking for short entries.
Depending on where we place our entry will impact our possible risk to reward. Some traders place their entry at the very bottom of the OB zone. Some traders use the very top point of the OB zone. I prefer to place my entry somewhere in the middle of the OB zone. My stop loss will be a couple of pips above that previous large wick. I use this area just so I can protect myself from any possible stop hunts.
My risk to reward will be 1 / 2
Order blocks need copious amounts of backtesting. There are so many ways of trading them. Some traders will spot them in higher time frames and then use lower time frames to enter them. I am a swing trader and only have time to enter on the 4-hour chart. This is why I trade them as I do. Use volume to help confirm price movement and always remember to trade with the current trend. Trading against the trend is more tricky and can be hazardous to your trading account.
Remember to be mindful whilst trading.
See you on the next one.
The Vortex Trader
Looking left, we can see that we had 4 wicks touching the previous support level. We then had a candle push through and close below that level.
This setup is very similar to yesterday's post on AUD/USD. The same rules for the position have been met.
I looked for the most recent bullish candle before the bearish impulse sending the price below this support level. I highlighted this candle from bottom wick to top wick and extended it right. This yellow zone is called the Order block zone. We can also abbreviate it and call it the OB zone.
I am now waiting for the price to retrace back into this yellow OB zone before opening up my short position targeting the previous price structure around the 0.997 price position.
EUR/USD is still bearish in my opinion. This means I am still looking for short entries.
Depending on where we place our entry will impact our possible risk to reward. Some traders place their entry at the very bottom of the OB zone. Some traders use the very top point of the OB zone. I prefer to place my entry somewhere in the middle of the OB zone. My stop loss will be a couple of pips above that previous large wick. I use this area just so I can protect myself from any possible stop hunts.
My risk to reward will be 1 / 2
Order blocks need copious amounts of backtesting. There are so many ways of trading them. Some traders will spot them in higher time frames and then use lower time frames to enter them. I am a swing trader and only have time to enter on the 4-hour chart. This is why I trade them as I do. Use volume to help confirm price movement and always remember to trade with the current trend. Trading against the trend is more tricky and can be hazardous to your trading account.
Remember to be mindful whilst trading.
See you on the next one.
The Vortex Trader
