How to Trade Order Blocks in Less Than 21 Minutes

About this video

• Video Title: How to Trade Order Blocks in Less Than 21 Minutes
• Channel: Kasper
• Speakers: Kasper
• Duration: 00:20:28

Overview

This video provides a comprehensive guide on how to trade using order blocks, a concept aimed at identifying high-probability trading opportunities. The presenter, Kasper, explains what order blocks are, why they are effective, and shares a five-star criteria system for identifying the best ones. He demonstrates how to apply this strategy across different timeframes and assets, offering practical examples and a bonus strategy.

Key takeaways

• Definition of Order Blocks: An order block is the last opposing candle before a strong price movement. In a downtrend, it's the last bullish candle; in an uptrend, it's the last bearish candle.
• Effectiveness of Order Blocks: They work because they represent areas where institutional investors have placed significant trades, and these levels tend to be protected.
• The Five-Star Criteria: To identify high-probability order blocks, five criteria must be met:
  1. Imbalance: The order block should create an imbalance (gap) in price.
  2. Trend: The order block should align with the prevailing market trend.
  3. Timing: Entry should occur when the price is in a "discount" zone (below 0.5 Fibonacci retracement for buys, above for sells).
  4. Liquidity: Avoid order blocks near significant liquidity pools (equal highs/lows).
  5. Mitigation: The order block should not have been previously tested or "mitigated."
• Fractal Nature: Order blocks are fractal, meaning they appear on all timeframes and across various assets, including volatile ones like gold and Bitcoin.
• Trading Strategy Application: The video demonstrates how to apply these criteria to identify and enter trades, including setting stop-losses and take-profits, with a focus on risk-reward ratios.