Order Blocks with Signals
The Sonarlab Order Block indicator detects order blocks for you on autopilot. Cool, but what is it?
So in trading, an order block is a price level where a large number of orders have been placed, creating a significant supply or demand zone. These order blocks can indicate potential areas of support or resistance and are often used by traders to make trading decisions. A block of orders can be formed from limit orders, stop-loss orders, and take-profit orders. By identifying these areas on a price chart, traders can use them to help identify potential entry and exit points for their trades. Users can determine the amount of bullish and bearish order/breaker blocks that display on their chart from within the settings menu.
- Sensitivity: this settings gives you the opportunity to turn the wheel to show less strong and strong order blocks.
- OB mitigation type: close or wick. If the candle wicks outside the order block the order block will be mitigated and disappear.
- Styling: OB color and border
- Buy alert
- Sell alert
How to use the Indicator
We have published several scripts covering the detection of order blocks previously.
When price mitigates an order block, you can look on the lower timeframe to confirm your trading bias.
This is a confirmation example where price taps into an order block and makes a market structure shift. The market confirms it wants to go down to show that it makes lower lows.